Jacob is a single taxpayer who has net investment income consisting of $9,000 in
ID: 2452800 • Letter: J
Question
Jacob is a single taxpayer who has net investment income consisting of $9,000 interest on a certificate of deposit, $4,500 from dividends from a mutual fund, $4,500 from capital gain distributions from mutual funds, and $26,000 in long term capital gains from selling some stocks and his MAGI is $120,000.
Jacob is a single taxpayer who has net investment income consisting of $9,000 interest on a certificate of deposit, $4,500 from dividends from a mutual fund, $4,500 from capital gain distributions from mutual funds, and $26,000 in long term capital gains from selling some stocks and his MAGI is $213,000.
Jacob is a single taxpayer who has net investment income consisting of $23,500 interest on a certificate of deposit, $12,000 from dividends from a mutual fund, $12,000 from capital gain distributions from mutual funds, and $42,500 in long term capital gains from selling some stocks and his MAGI is $290,000.
a.Jacob is a single taxpayer who has net investment income consisting of $9,000 interest on a certificate of deposit, $4,500 from dividends from a mutual fund, $4,500 from capital gain distributions from mutual funds, and $26,000 in long term capital gains from selling some stocks and his MAGI is $120,000.
Explanation / Answer
Ans. a Jacob (single taxpayer) will not be assessed to surtax on his Form 1040 for 2014 because his MAGI OF $120,000 is less than his statutory threshold of $ 200,000.
Ans. b Jacob (single taxpayer) will be assessed to surtax of $494 on his Form 1040 for 2014 because his MAGI $213,000 is more than his statutory threshold of$ 200,000.The Net Investment Income Tax is based on the lesser of $13,000 (the amount that Taxpayer’s modified adjusted gross income exceeds the $200,000 threshold) or $44,000 (Taxpayer’s Net Investment Income). Taxpayer owes NIIT of $494 ($13000x 3.8%).
Ans. c Jacob (single taxpayer) will be assessed to surtax of $3420 on his Form 1040 for 2014 because his MAGI $290,000 is more than his statutory threshold of$ 200,000.The Net Investment Income Tax is based on the lesser of $90,000 (the amount that Taxpayer’s modified adjusted gross income exceeds the $200,000 threshold) or $90,000 (Taxpayer’s Net Investment Income). Taxpayer owes NIIT of $3420 ($90000x 3.8%). Here NII and excess over thrshjold limit both are same we can take either of two.
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