IS: Net Investment Income and 3.8% Medicare Tax

General Description:

The Individual Series of classes is designed for tax return preparers and new tax professionals. Participants will acquire an understanding of the underlying authority for, and possible complexity of, seemingly ­simple tax questions, and how that authority ties into tax software programs and preparation of the tax return for an individual. This course specifically addresses the 3.8% Medicare tax on net investment income and filing Form 8960.

Learning Objective:

After completing this course the participant will be able to:

• Identify taxpayers subject to 3.8% Medicare tax on net investment income (Form 8960) and the 0.9% Medicare tax (Form 8959).
• Identify activities that are subject to the 3.8% Medicare tax, including dividends, interest, rentals, stock sales, and many other activities.
• Recognize the rules that apply to self rental and self-charged interest.
• Describe when an ownership interest in an entity might be subject to the 3.8% tax.
• Calculate net investment income.
• Describe how the net investment income rules interact with the passive loss rules.
• Calculate the net operating loss for net investment income.
• Describe the tax planning opportunities that are available to minimize the effect of the 3.8% Medicare tax.
• Apply the 3.8% Medicare tax to real estate professionals.
• Apply the net investment income rules to the sale or exchange of an interest in a pass-through entity and differentiate between available options.
• Describe the interaction between the 3.8% tax on net investment income and the ­deduction under §199A on qualified business income.

Instructors:

Mark A. Vogel is a retired professor and director of the University of Denver Graduate Tax Program, where for 38 years he taught courses in individual, fiduciary, tax accounting, partnership, and corporate taxation. He is the author of Divorce Taxation Guide (John Wiley & Sons) and Individual Taxation (Shepards/McGraw-Hill). He received a J.D. and LL.M. in Taxation from the University of Denver College of Law and an undergraduate accounting degree from the University of Notre Dame. He is also a CPA licensed in Illinois.

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