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nick88lynch
New Member

How exactly does the Net Investment Income Tax work on real estate? As a single filer I understand the threshold is 200k.

So in more detail. For example if i had a gain of 250,000 with the threshold for me being anything over 200,000, what amount is taxable at the 3.8%?  Is it the entire gain of 250,000? Or would it be only 3.8% of the 50,000 that was past the threshold? Thanks for any advice!

1 Best answer

Accepted Solutions
TaxGuyBill
Level 9

How exactly does the Net Investment Income Tax work on real estate? As a single filer I understand the threshold is 200k.

Just the amount over the threshold is subject to the Net Investment Income Tax.

However, the threshold is based on your total income (Modified Adjusted Gross Income), not just the Net Investment Income.

So in your example, let's say you also had $100,000 of wages, for a total income of $350,000.  In that example, $150,000 would be subject to the tax.

You can look at how it works on Form 8960.

https://www.irs.gov/pub/irs-pdf/f8960.pdf

https://www.irs.gov/uac/newsroom/net-investment-income-tax-faqs

View solution in original post

2 Replies
TaxGuyBill
Level 9

How exactly does the Net Investment Income Tax work on real estate? As a single filer I understand the threshold is 200k.

Just the amount over the threshold is subject to the Net Investment Income Tax.

However, the threshold is based on your total income (Modified Adjusted Gross Income), not just the Net Investment Income.

So in your example, let's say you also had $100,000 of wages, for a total income of $350,000.  In that example, $150,000 would be subject to the tax.

You can look at how it works on Form 8960.

https://www.irs.gov/pub/irs-pdf/f8960.pdf

https://www.irs.gov/uac/newsroom/net-investment-income-tax-faqs

nick88lynch
New Member

How exactly does the Net Investment Income Tax work on real estate? As a single filer I understand the threshold is 200k.

Great, thank you! I found the same faq page. Just wanted to double check with people more experienced. Thank you very much.

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