Reminders

Digital assets. Income derived from transactions involving digital assets may be subject to the tax imposed on net investment income (NII) under section 1411(a), which applies in addition to other income taxes imposed under subtitle A of the Code.

Charitable contribution deduction for electing small business trusts (ESBTs). Line 18b of Form 8960 was updated to reflect changes outlined in P. L. 115-97, section 13542, that amended the way the S portion of an ESBT accounts for charitable contribution deductions under section 170(b) instead of section 641(c), effective January 1, 2018. See Line 18b Deductions for Distributions of Net Investment Income and Charitable Deductions .

Schedule SE (Form 1040) income. Income taken into account in determining self-employment income subject to tax under section 1401(b) is specifically excluded from NIIT under section 1411(c)(6). This doesn’t include income that is excepted from net earnings from self-employment (NESE) under section 1402(a)(1) through 1402(a)(17). This income is subject to NIIT. See Special Rule for Self-employed Individuals .

Trade or business income subject to net investment income tax (NIIT). Line 4a of Form 8960 includes total income reported on Schedules C, E, and F (Form 1040) that is potentially subject to NIIT.

These instructions are based mostly on Regulations sections 1.1411-1 through 1.1411-10.