Net Investment Income and 3.8% Medicare Tax

Description

Participants will acquire an understanding of the underlying authority for, and possible complexity of, seemingly simple tax questions and how that authority ties into tax software programs and preparation of the tax return for an individual. This course specifically addressed the 3.8% Medicare tax on net investment income and filing Form 8960.

Highlights

LINK AND INSTRUCTIONS TO COME FROM AES TAX ONE DAY PRIOR TO SESSSION

Objectives

After completing this course the participant will be able to:

• Identify Taxpayers subject to 3.8% Medicare tax on net investment income (Form 8960) and the 0.9% Medicare tax (Form 8959).
• Identify activities that are subject to the 3.8% Medicare tax, including dividends, interest, rentals, stock sales, and many other activities.
• Recognize the rules that apply to self rental and self-charged interest.
• Describe when an ownership interest in an entity might be subject to the 3.8% tax.
• Calculate the net investment income.
• Describe how the new investment income rules interact with the passive loss rules.
• Calculate the net operating loss for net investment income.
• Describe the tax planning opportunities that are available to minimize the effect of the 3.8% Medicare tax.
• Describe how the 3.8% Medicare tax applies to real estate professionals and how to avoid it.
• Apply the net investment income rules to the sale or exchange of an interest in a pass-through entity and differentiate between available options.
• Describe the interaction between the 3.8% tax on net investment income and the deduction under §199A for qualified business income.