In 2019, Amber earned a salary of $230,000 and also had the following items of investment income: $28,000 net short-term capital gain on sale of stock, $8,000 dividend income, $6,000 interest income from corporate bonds, and $5,000 interest income from tax-exempt municipal bonds.Compute Amber's net investment income (NII) tax if the tax rate is 3.8% and the threshold is $200,000.

Question

Quizplus · Accepted Answer

The net investment income tax is calculated as 3.8% of the net investment income, which is the sum of the investment income items minus the threshold. In this case, the net investment income is $28,000 + $8,000 + $6,000 - $200,000 = $2,000. Therefore, the net investment income tax is 3.8% * $2,000 = $76.

In 2019, Amber Earned a Salary of $230,000 and Also