Tax reform - Everything is subject to either NIIT or SE tax

Technical topics regarding tax preparation.
#1
Wiles  
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The early versions of the tax reform that appeared a year ago (pre-election) included a repeal of the NIIT. Last week's proposed tax reform included no such repeal. I believe the R's want such a repeal tied into an overall repeal of ACA.

Or do they?

The current tax proposal seems to extend the reach of the NIIT. It grabs all other income that previously avoided the NIIT and has made that income subject to SE tax, which at the higher income levels is (almost) the same rate as the NIIT. Effectively, we have the equivalent of a 3.8% surtax on all income for higher income taxpayers.

How would they be able to repeal the NIIT now? If they do, then passive wins and nonpassive loses. Rental property owners will now have to make the case that their rental activities are not a trade or business - whatever that means.
 

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