§1411 — Imposition of tax
4 cases·4 cited
Statute Text — 26 U.S.C. §1411
Except as provided in subsection (e)—
In the case of an individual, there is hereby imposed (in addition to any other tax imposed by this subtitle) for each taxable year a tax equal to 3.8 percent of the lesser of—
net investment income for such taxable year, or
the excess (if any) of—
the modified adjusted gross income for such taxable year, over
the threshold amount.
In the case of an estate or trust, there is hereby imposed (in addition to any other tax imposed by this subtitle) for each taxable year a tax of 3.8 percent of the lesser of—
the undistributed net investment income for such taxable year, or
the excess (if any) of—
the adjusted gross income (as defined in section 67(e)) for such taxable year, over
the dollar amount at which the highest tax bracket in section 1(e) begins for such taxable year.
For purposes of this chapter, the term “threshold amount” means—
in the case of a taxpayer making a joint return under section 6013 or a surviving spouse (as defined in section 2(a)), $250,000,
in the case of a married taxpayer (as defined in section 7703) filing a separate return, ½ of the dollar amount determined under paragraph (1), and
in any other case, $200,000.
For purposes of this chapter—
The term “net investment income” means the excess (if any) of—
the sum of—
gross income from interest, dividends, annuities, royalties, and rents, other than such income which is derived in the ordinary course of a trade or business not described in paragraph (2),
other gross income derived from a trade or business described in paragraph (2), and
net gain (to the extent taken into account in computing taxable income) attributable to the disposition of property other than property held in a trade or business not described in paragraph (2), over
the deductions allowed by this subtitle which are properly allocable to such gross income or net gain.
A trade or business is described in this paragraph if such trade or business is—
a passive activity (within the meaning of section 469) with respect to the taxpayer, or
a trade or business of trading in financial instruments or commodities (as defined in section 475(e)(2)).
A rule similar to the rule of section 469(e)(1)(B) shall apply for purposes of this subsection.
In the case of a disposition of an interest in a partnership or S corporation—
gain from such disposition shall be taken into account under clause (iii) of paragraph (1)(A) only to the extent of the net gain which would be so taken into account by the transferor if all property of the partnership or S corporation were sold for fair market value immediately before the disposition of such interest, and
a rule similar to the rule of subparagraph (A) shall apply to a loss from such disposition.
The term “net investment income” shall not include any distribution from a plan or arrangement described in section 401(a), 403(a), 403(b), 408, 408A, or 457(b).
Net investment income shall not include any item taken into account in determining self-employment income for such taxable year on which a tax is imposed by section 1401(b).
For purposes of this chapter, the term “modified adjusted gross income” means adjusted gross income increased by the excess of—
the amount excluded from gross income under section 911(a)(1), over
the amount of any deductions (taken into account in computing adjusted gross income) or exclusions disallowed under section 911(d)(6) with respect to the amounts described in paragraph (1).
This section shall not apply to—
a nonresident alien, or
a trust all of the unexpired interests in which are devoted to one or more of the purposes described in section 170(c)(2)(B).
Treasury Regulations
- Treas. Reg. §Treas. Reg. §1.1411-0 Table of contents of provisions applicable to section 1411
- Treas. Reg. §Treas. Reg. §1.1411-0(a) In general.
- Treas. Reg. §Treas. Reg. §1.1411-0(b) Amounts derived from a trade or business described in § 1.
- Treas. Reg. §Treas. Reg. §1.1411-0(c) Calculation of net investment income.
- Treas. Reg. §Treas. Reg. §1.1411-0(d) Conforming basis adjustments.
- Treas. Reg. §Treas. Reg. §1.1411-0(e) Conforming adjustments to modified adjusted gross income and adjusted gross income.
- Treas. Reg. §Treas. Reg. §1.1411-0(f) Application to estates and trusts.
- Treas. Reg. §Treas. Reg. §1.1411-0(g) Election with respect to CFCs and QEFs.
- Treas. Reg. §Treas. Reg. §1.1411-0(h) Examples.
- Treas. Reg. §Treas. Reg. §1.1411-0(i) Effective/applicability date.
- Treas. Reg. §Treas. Reg. §1.1411-0(v) Items described in section 691(c).
- Treas. Reg. §Treas. Reg. §1.1411-1 General rules
- Treas. Reg. §Treas. Reg. §1.1411-1(a) General rule.
- Treas. Reg. §Treas. Reg. §1.1411-1(b) Adjusted gross income.
- Treas. Reg. §Treas. Reg. §1.1411-1(c) Effect of section 1411 and the regulations thereunder for other purposes.
- Treas. Reg. §Treas. Reg. §1.1411-1(d) Definitions.
- Treas. Reg. §Treas. Reg. §1.1411-1(e) Disallowance of certain credits against the section 1411 tax.
- Treas. Reg. §Treas. Reg. §1.1411-1(f) Application to taxable years beginning before January 1, 2014—(1) Retroactive application of regulations.
- Treas. Reg. §Treas. Reg. §1.1411-1(g) Effective/applicability date.
- Treas. Reg. §Treas. Reg. §1.1411-1(i) Items of income excluded from gross income in chapter 1.
- Treas. Reg. §Treas. Reg. §1.1411-1(v) Substitute dividends that represent payments made to the transferor of a security in a securities lending transaction or a sale-repurchase transaction.
- Treas. Reg. §Treas. Reg. §1.1411-10 Controlled foreign corporations and passive foreign investment companies
- Treas. Reg. §Treas. Reg. §1.1411-10(a) In general.
- Treas. Reg. §Treas. Reg. §1.1411-10(b) Amounts derived from a trade or business described in § 1.
- Treas. Reg. §Treas. Reg. §1.1411-10(c) Calculation of net investment income—(1) Dividends.
4 Citing Cases
ng tax on his 2013 and 2017 gains. 2 The notice of deficiency made two other adjustments for 2017: disallowance of a $4,050 personal exemption petitioner had claimed and a determination that he was liable for net investment income tax of $254 under section 1411. These adjust- ments were purely computational, triggered by the large adjustment to his 2017 taxa- ble income, and they are not separately at issue. 5 [*5] Petitioner’s argument has no legal basis. The doctrine of estoppel can be invoked
21. P is a U.S. citizen who resides in a foreign country. P filed a Federal income tax return claiming a carryover of her foreign tax credit for tax that she paid to France and Italy in prior years to offset the net investment income tax imposed by I.R.C. sec. 1411 for 2013. R assessed the I.R.C. sec. 1411 tax, determined without the credit, as a math error and an addition to tax for failure to pay a tax shown on a return under I.R.C. sec. 6651(a)(2). P did not pay the assessed amount. R issued
forth in the notice ofdeficiency as follows: (1) inclusion ofa taxable State income tax refund of$2,969; (2) adjustment to itemized deductions of$59; (3) alternative minimum tax (AMT) of$15,308; and (4) net investment income tax of$2,262 pursuant to sec. 1411. Petitioner disputes the accuracy-related penalty. - 3 - account for and compute the AMT or the net investment income tax, nor did he report his taxable State income tax refund. Petitioner prepared his 2013 Form 1040 without the use oftax p