Answered

Discover answers to your questions with Westonci.ca, the leading Q&A platform that connects you with knowledgeable experts. Get immediate and reliable solutions to your questions from a knowledgeable community of professionals on our platform. Connect with a community of professionals ready to help you find accurate solutions to your questions quickly and efficiently.

Allen Green is a single taxpayer with an AGI (and modified AGI) of $214,000, which includes $172,000 of salary, $26,200 of interest income, $10,400 of dividends, and $5,400 of long-term capital gains. What is Allen's net investment income tax liability this year, rounded to the nearest whole dollar amount

Sagot :

Tundexi

Answer:

$532

Explanation:

The income that is considered for NIIT is the (a) lesser of the net investment income or (b) the amount by which MAGI exceeds the applicable threshold.

a. $42,000 ($26,200 interest income + $10,400 dividends + $5,400 Long-term capital gains)

b. $14,000 ($214,000 - $200,000)

Note: MAGI threshold of $200,000 for single taxpayer is applicable before they fall under the NIIT bracket of 3.8% of tax.

Net Investment Income = $14,000

Net investment income tax liability = Net Investment Income * 3.8%

Net investment income tax liability = $14,000 * 3.8%

Net investment income tax liability = $532

So, Allen's net investment income tax liability this year is $532.

Thank you for visiting. Our goal is to provide the most accurate answers for all your informational needs. Come back soon. Your visit means a lot to us. Don't hesitate to return for more reliable answers to any questions you may have. Get the answers you need at Westonci.ca. Stay informed with our latest expert advice.