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The 3.8% Net Investment Income Tax: An Analysis of the Proposed Regs. and Related Planning Opportunities


Product Code - TMW53
Speaker(s): James R. Brockway, Withers Bergman
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Enacted as part of the health care legislation in early 2010 to help pay for the new health care law, Internal Revenue Code section 1411 imposes a 3.8% tax—the “Net Investment Income Tax”—on certain individuals, estates, and trusts. It may apply to items passed through to individuals from partnerships and S corporations.

The new tax, which has remained largely “hidden” until recently, became effective on January 1, 2013, and the proposed regulations published on December 5, 2012, provide the only guidance that taxpayers will have on the tax when it takes effect.

Join us for a detailed analysis of Section 1411 net investment income tax, now imposed at a rate of 3.8% on many taxpayers.

Topics to be covered include:

  • The Statutory Framework
  • General Summary of the Proposed Regulations; Effective Date
  • Application to Individuals
  • Application to Trust and Estates
  • Net Investment Income; Definitions and Determination
  • Income Allocations Through Pass-Through Entities
  • Disposition of Interests in Pass-Through Entities
  • Application to Income from Controlled Foreign Corporations and Passive Foreign Investment Companies
  • Planning for Individuals
  • Planning for Trust and Estates
  • Planning for Pass-Through Entities
  • Questions and Answers

This webinar will help attendees:

  • Learn which taxpayers are subject to the tax
  • Appreciate the interaction of the 3.8% tax with tax changes in the American Taxpayer Relief Act of 2012
  • Understand what types of income and gain trigger the tax
  • See how the new tax may impact tax planning for all taxpayers
  • Know the issues left unresolved by the new regulations 

James R. Brockway, Withers Bergman

Jim is co-chairman of the worldwide Wealth Planning practice group at the firm. His practice is global in scope with particular emphasis on offshore trust planning, planning for non-U.S. individuals and foreign assets, family investment and business planning, family offices and inbound and outbound business and income and transfer tax planning.

He also advises on corporate and partnership tax planning for closely held businesses, investment entities and funds management entities as well as on mergers and acquisitions and insurance and derivatives investment tax planning.