Part — Instruction 8960 — Instructions for Form

Elections for Investment Income If you’re making the section 6013(g) or 6013(h) election (see Election To File Jointly With Nonresident Spouse—Section 6013(g) or 6013(h) , earlier), check the corresponding checkbox.

If you’re making or have made a section 1.1411-10(g) election (see Regulations Section 1.1411-10(g) Election , earlier), check the corresponding checkbox and attach a statement to your return, as described earlier under Content requirements of election .

Line 1—Taxable Interest

Enter the amount of taxable interest received. Include the following amount from your return.

Form 1040 or 1040-SR, line 2b.
Form 1041, line 1.
Form 1041-QFT, line 1a.
Form 1040-NR, taxable interest received for period of U.S. residency shown on attached statement.

See Special computational rules for qualified funeral trusts (QFTs) and Dual-status individual , earlier.

Adjustments to interest. Interest income earned in the ordinary course of your non-section 1411 trade or business is excluded from NII. If this type of interest income is included on line 1, use line 7 to adjust your NII.

If line 1 includes self-charged interest income received from a partnership or S corporation that’s a nonpassive activity (other than a trade or business of trading in financial instruments or commodities), see Line 7—Other Modifications to Investment Income, later, for a possible adjustment to NII.

Line 2—Ordinary Dividends

Enter the amount of ordinary dividends received. Include the following amount from your return.

Form 1040 or 1040-SR, line 3b.
Form 1041, line 2a.
Form 1041-QFT, line 2a.
Form 1040-NR, ordinary dividends received for period of U.S. residency shown on attached statement.

See Special computational rules for qualified funeral trusts (QFTs) and Dual-status individual , earlier.

Adjustments to dividends. If line 2 includes dividends from employer securities held in an employee stock ownership plan (ESOP) that are deductible under section 404(k) or Alaska Permanent Fund Dividends, include those amounts as negative modifications on line 7. See Line 7—Other Modifications to Investment Income, later.

Line 3—Annuities

Enter the gross income from all annuities, except annuities paid from the following.

Section 401—qualified pension, profit-sharing, and stock bonus plans.
Section 403(a)—qualified annuity plans purchased by an employer for an employee.
Section 403(b)—annuities purchased by public schools or section 501(c)(3) tax-exempt organizations.
Section 408—individual retirement accounts (IRAs) or annuities.
Section 408A—Roth IRAs.
Section 457(b)—deferred compensation plans of a state and local government and tax-exempt organization.
Amounts paid in consideration for services (for example, distributions from a foreign retirement plan that are paid in the form of an annuity and include investment income that was earned by the retirement plan).

How your annuities are reported to you. NII from annuities is reported to a recipient on Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. However, the amount reported on Form 1099-R may also include annuity payments from retirement plans that are exempt from NIIT. Amounts subject to NIIT should be identified with code “D” in box 7. If code “D” is shown in

Instructions for Form 8960 (2025) 7

box 7 of Form 1099-R, include on Form 8960, line 3, the taxable amount reported in box 2a of Form 1099-R. However, if the payor checks box 2b indicating the taxable amount can’t be determined, you may need to calculate the taxable portion of your distribution. See Pub. 939, General Rule for Pensions and Annuities; and Pub. 575, Pension and Annuity Income, for details.

Line 4a—Income From Trades/Businesses/ Farming, Rental Real Estate, Royalties, Partnerships, S Corporations, and Trusts

Enter the following amount from your properly completed return.

Schedule 1 (Form 1040), line 3.
Schedule 1 (Form 1040), line 5.
Schedule 1 (Form 1040), line 6.
Form 1041, line 3.
Form 1041, line 5.
Form 1041, line 6.
Form 1041-QFT, the portion of line 4 that’s income and loss that would properly be reported by a trust filing Form 1041 on Form 1041, line 5.
Form 1040-NR, the amount properly reported on the attachment to your Form 1040-NR representing the amount that you would properly include on Schedule 1 (Form 1040), line 5, if you were filing Form 1040 or 1040SR and including income and loss only for your period of U.S. residency.

See Special computational rules for qualified funeral trusts (QFTs) and Dual-status individual , earlier.

negative amount for the following items included on line 4a that aren’t included in determining NII.

• Other rental income or loss from a section 162 trade or business reported on Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc., line 3, from a partnership, or Schedule K-1 (Form 1120-S), Shareholder’s Share of Income, Deductions, Credits, etc., line 3, from an S corporation, where the activity isn’t a passive activity.

Net income or loss from a section 162 trade or business that’s not a passive activity and isn’t engaged in a trade or business of trading financial instruments or commodities.
Net income or loss from a section 1411 trade or business that’s taken into account in determining self-employment income. See Special Rule for Self-employed Individuals, earlier.

• Royalties derived in the ordinary course of a section 162 trade or business that’s not a passive activity.

Passive losses of a former passive activity that are allowed as a deduction in the current year under section 469(f)(1)(A).

In addition, use line 4b to adjust for certain types of nonpassive rental income or loss derived in the ordinary course of a section 162 trade or business. For example, line 4b includes the following items.

Nonpassive net rental income or loss of a real estate professional where the rental activity rises to a section 162 trade or business.
Net rental income or loss that’s a nonpassive activity because it was grouped with a trade or business under Regulations section 1.469-4(d)(1). See Special Rules for Certain Rental Income , earlier.