The Net Investment Income Tax (NIIT) and Protecting Your Investments

CHICAGO - April 21, 2015 - PRLog -- The Net Investment Income Tax (NIIT) and Protecting Your Investments

CHICAGO –With tax season at a close, some individuals may need to consider the Net Investment Income Tax.  The Net Investment Income Tax (NIIT) applies at a rate of 3.8% to certain net investment income of individuals, estates and trusts that have income above the statutory threshold amounts.

Christopher Floss, Associate at Hoogendoorn & Talbot LLP, is a leading attorney on taxation issues.  His expert advice guides clients through best practices for income taxes, estate planning, real estate transactions, and other related legal services. Those taxpayers subject to the NIIT should carefully evaluate tax planning options to minimize its impact on their investments.

According to Floss, there is very little planning that can be done on an individual level if you meet the criteria for this tax. “However,” he notes, “taxpayers looking to protect their investments from unnecessary tax can take several actions, such as minimizing the sale of highly appreciated capital assets or attempting to transform a passive activity into an active trade or business.”

For trusts, there are several planning opportunities, such as passing out capital gains as allowed by a trust agreement or local law, or ensuring that trustees meet the material participation rules for active trades or businesses.

The lawyers of Hoogendoorn & Talbot LLP are dedicated to protecting your interests. Taxpayers are strongly advised to consult publications listed on the IRS website, or competent tax professionals, for further guidance on this topic. (See http://www.quora.com/Christopher-Floss.)

Hoogendoorn & Talbot LLP, founded in 1985, is a law firm that focuses on representing families, business entities and charitable organizations.  Each year, the firm and its partners donate a portion of their time, talent, and revenue both to secular not-for-profit entities and faith-based organizations.