Instructions For Form 8960 - Net Investment Income Tax - Individuals, Estates, And Trusts - 2017 Page 13
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20Line 7—Deduction Recoveries Worksheet
Keep for Your Records
1. Enter total amount of recovery included in gross income . . . . . . . . . . . . . . . . . 1.
Don’t include recoveries of items that are included in net investment
income in the year of recovery (included on lines 1–6).
Don’t include recoveries of items if the amount relates to a deduction
taken in a tax year beginning before 2013.
Don’t include recoveries of items if the amount relates to a deduction
taken in a tax year beginning after 2012, and you weren’t subject to the
NIIT solely because your MAGI was below the applicable threshold.
This rule doesn’t apply if you incurred a net operating loss (NOL) in such
year, and a portion of such NOL constitutes a section 1411 NOL.
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CAUTION
2. Amount of the recovery that would’ve been included in gross income but
for the application of the tax benefit rule under section 111 . . . . . . . . . . . . . . . 2.
3. Total amount of recovery (add lines 1 and 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.
4. Enter the percentage of the deduction allocated to net investment income
in the prior year. (If the deduction wasn’t allocated between investment
income and non-investment income, enter 100%.) . . . . . . . . . . . . . . . . . . . . . . 4.
5. Enter the lesser of (a) line 3 multiplied by line 4, or (b) the total amount deducted
on the prior year Form 8960 attributable to item recovered (after any deduction
limitations imposed by section 67 or 68) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.
Calculation of recoveries when the deduction isn’t taken into account in computing your section 1411 NOL
6. Multiply line 5 by 0.038 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.
7. Enter the amount of net investment income in the year of the deduction
(previous year’s Form 8960, line 12, unless line 12 is zero, then previous
year's Form 8960, line 8 minus line 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.
8. Add the amount of line 5 to line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.
9. Using the previous year's Form 8960, recalculate the NIIT for the year of
the deduction by replacing the amount reported on line 12 with the amount
reported on line 8 of this worksheet (don’t use the net investment income
reported on that year's Form 8960, line 12). Enter your recalculated NIIT
here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
10. Enter the NIIT reported for the year of the deduction . . . . . . . . . . . . . . . . . . . . . 10.
11. Subtract line 10 from line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.
12. Enter the smaller of line 6 or line 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.
13. Divide line 12 by 3.8% (line 12 ÷ 0.038). Enter the result here and include on
Form 8960, line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.
Calculation of recoveries when the deduction is taken into account in computing your section 1411 NOL
14. Enter the amount of the section 1411 NOL in the year of the deduction
(entered as a positive number) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.
15. Enter the amount of the section 1411 NOL in the year of the deduction
recomputed without the amount on line 5 (entered as a positive number,
but not less than zero) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.
16. Subtract line 15 from line 14. Enter the result here and include on
Form 8960, line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.
Instructions for Form 8960 (2017)
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