Enrolled Agent Exam [Part 1] 53, Net Investment Income Tax (NIIT)

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: • NIIT is a 3.8% tax calculated on the lesser of net investment income or the excess of Modified AGI over specific thresholds. • The critical MAGI thresholds to memorize are $250,000 for Married Filing Jointly, $200,000 for Single/Head of Household, and $125,000 for Married Filing Separately. • Investment income includes interest, dividends, capital gains, and passive rental income, but crucially excludes wages, active business income, and tax-exempt interest. • A major exam trap is miscalculating the tax base; it is not always the full amount of net investment income. • Taxpayers qualifying as real estate professionals who materially participate can treat their rental income as non-passive, thereby avoiding the NIIT on that income. For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or Youtube Channel: https://www.youtube.com/@Open-exam-prep