@rmilling3165 wrote:
@Anonymous_
The instructions appear to contradict or are incomplete.
Per the instructions to Form 8960
Definitions
Excluded income. Excluded income
means:
• Income excluded from gross income in
chapter 1 of the Internal Revenue Code;
• Income not included in net investment
income; and
• Gross income and net gain specifically
excluded by section 1411, related
regulations, or other guidance published in
the Internal Revenue Bulletin.
Examples of excluded items are:
• Wages,
• Unemployment compensation,
• Alaska Permanent Fund Dividends,
• Alimony,
• Social security benefits,
• Tax-exempt interest income,
• Income from certain qualified retirement
plan distributions, and
• Income subject to self-employment
taxes.
I just re-read your post (carefully this time) and the instructions do not appear to contradict.
The items of income listed in the "definitions" (from the instructions) are items of income excluded from net investment income and not items of income excluded from the calculation of the NIIT (big difference).
Clearly, the instructions are confusing, but the calculation appears to be correct on Line 13. Perhaps, the IRS is interpreting this scenario differently.
