Article on New Tax on Net Investment Income

Steven B. Gorin, Lisa M. Rico, & Amber K. Quintal recently published an article entitled, Get Ready for the 3.8% Tax on Net Investment Income, 27 Prob. & Prop. 30 (July/August 2013).  Provided below is the introduction to the article:

Beginning in 2013, a new tax of 3.8% is imposed on certain unearned net investment income of individuals, estates, and trusts whose income exceeds applicable threshold levels.  The new tax, commonly referred to as the “Net Investment Income Tax,” or NIIT, is found in new Internal Revenue Code (IRC) § 1411, enacted by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (the “2010 Health Care Act”).  The IRS has issued proposed regulations under IRC § 1411 that would generally apply to tax years beginning after December 31, 2013. REG-130507-11 (Dec. 5, 2012).  Taxpayers can rely on proposed regulations, however, for compliance purposes until final regulations are adopted.