Selling Appreciated Investments

Selling Appreciated Investments? Don’t Overlook the Net Investment Income Tax

Planning to sell appreciated investments before year end? Don’t overlook the net investment income tax (NIIT). A large capital gain could push your modified adjusted gross income (MAGI) above the NIIT threshold ($200,000 for single filers, $250,000 for married joint filers or $125,000 for married filing separately), potentially increasing your tax bill. The NIIT equals 3.8% of the lesser of net investment income or MAGI above the threshold. Net investment income generally includes taxable interest, dividends, capital gains, rents and royalties. Before selling highly appreciated investments, contact us. We can help assess your potential NIIT liability and discuss ways to limit your exposure.