Net Investment Income


Also found in: Acronyms.

Net Investment Income

The income one derives from capital gains, dividends and other activities related to the purchase and sale of securities. It is calculated by subtracting losses on securities transactions from gains. Investment income differs from wages and salary primarily in that one does not need to work for investment income. One can manage one's investments oneself or one can hire a money manager to do it. Both individuals and companies can have net investment income; indeed a publicly-traded company must list its net investment income on its balance sheet. Investment income is often taxed differently than other income. See also: Capital gains tax.
References in periodicals archive ?
Net investment income and core net investment income decreased in the quarter ended December 31, 2016, as compared to the quarter ended December 31, 2015, primarily as a result of less non-recurring income related to the acceleration of interest income in conjunction with the payoff of loans in the quarter ended December 31, 2016, as compared to the quarter ended December 31, 2015.
In simple terms, undistributed net investment income is any net investment income--as defined by Code section 1411(c)(1)(A)--that is retained by a trust or an estate.
The net investment income tax applies to trusts and estates for tax years beginning after Dec.
But if the $50,000 is invested in growth stocks that pay only $500 in dividends, current deductions are limited to the net investment income of $500; the remaining interest expense of $4,500 must be carried forward indefinitely.
net investment income receipts remained positive last year.
Only individuals with MAGI above the thresholds and certain estates and trusts are subject to the net investment income tax.
As such, it is not earned in the ordinary course of a trade or business and, thus, regardless of the other exceptions, is subject to the net investment income tax.
If Doris had $2,000 investment income, imputed interest would be computed, but would be limited to her $2,000 net investment income.
This results in additions to or draws from the fund's undistributed net investment income (UNII) balance.
4940(c)(1), which states that "[e]xcept to the extent inconsistent with the provisions of this section, net investment income shall be determined under the principles of Subtitle A.
However, if estimated net investment income for the year is expected to increase (e.
Interest expense incurred by noncorporate taxpayers that is allocable to property held for investment ("investment interest expense") is generally allowed as a deduction only to the extent of that taxpayer's net investment income.