Looking for a Tax Form 8960 Templates? Download it for free!

Line 10—Worksheet for Traders in Financial Instruments That

Maintain More Than One Trade or Business

Keep for Your Records

Use this worksheet to determine the amount on line 10.

1. Enter the total amount from Schedule SE (Form 1040), line 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.

2. (a) If the amount on Schedule SE (Form 1040), line 3, is zero or greater, you can’t use the

expenses from your trade or business to reduce your investment income. Stop here.

(b) If the amount on Schedule SE (Form 1040), line 3, is a negative amount, enter your

expenses from your trade or business of trading in financial instruments or commodities

(entered as a positive amount). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2b.

3. Add line 1 to line 2b. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.

(a) If the amount on line 3 of this worksheet is zero or less, include the trade or business

expenses (line 2b of the worksheet) on Form 8960, line 10.

(b) If the amount on line 3 of this worksheet is a positive number, convert the amount from

Schedule SE (Form 1040), line 3 (line 1 of this worksheet) into a positive number and

include it on Form 8960, line 10.

need to complete Schedule SE (Form

overall limitation, used in determining your

you don’t own a CFC or PFIC, your MAGI

1040), Self-Employment Tax.

net investment income is the lesser of:

is your AGI as reported on Form 1040. If

That portion of your miscellaneous

you exclude amounts under section 911 or

If you have more than one trade or

itemized deductions before the application

own certain CFCs or PFICs, your MAGI is

business, you must complete

of the 2% floor that’s properly allocable to

your AGI as modified by certain rules

Schedule SE (Form 1040) to determine

net investment income, or

described in Regulations section

whether you can include some or all of the

Your total miscellaneous itemized

1.1411-10(e)(1).

trading business Schedule C (Form 1040)

deductions allowed after the application of

expenses as a deduction on line 10.

Section 911. If you exclude amounts

the 2% floor but before the application of

Complete the

Line 10—Worksheet for

from income under section 911, to

the overall limitation on itemized

Traders in Financial Instruments That

calculate your MAGI, you must increase

deductions.

Maintain More Than One Trade or

your AGI by the excess of the amount

Business.

excluded from income under section

Itemized deductions. The amount of

911(a)(1) over the amount of any

your itemized deductions allowed in

Note. See the Instructions for

deductions (taken into account in

determining your net investment income

Schedule SE (Form 1040) for who must

computing AGI) or exclusions disallowed

after applying both the 2% floor and

file a Schedule SE (Form 1040). Retain a

under section 911(d)(6) for the amount

overall limitation is the lesser of:

copy of the Schedule SE (Form 1040) and

excluded from income under section

The sum of:

the worksheet used to determine the

911(a)(1). Use

Line 13 — MAGI

1. The amount of your miscellaneous

expenses included as a modification on

Worksheet

in these instructions to

itemized deductions allowed as a

line 10 with your records. Don’t file the

compute your MAGI.

deduction against your net investment

worksheet with Form 1040.

income (before application of the overall

CFCs and PFICs. If you own, directly or

The amounts reported on line 10 are

limitation), and

indirectly, stock in a CFC or PFIC other

the amounts allowable after the

than certain CFCs and PFICs held in a

2. The total amount of your itemized

application of the deduction limitations

section 1411 trade or business or PFICs

deductions that aren’t subject to the 2%

imposed by sections 67 and 68, as

marked to market under section 1296 or

floor and are properly allocable to items of

applicable. See

Deductions subject to AGI

any other provision, to calculate your

income or net gain for purposes of

limitations under section 67 or section

68,

MAGI, you may need to make certain

determining your net investment income,

next.

adjustments to your AGI, as provided in

Deductions subject to AGI limitations

Regulations section 1.1411-10(e)(1).

The total amount of your itemized

under section 67 or section 68. Any

Generally, these adjustments include:

deductions allowed after the application of

deduction allowed against net investment

1291 funds.

both the 2% floor and the overall limitation

income that, for purposes of computing

on itemized deductions.

1. Increase AGI by the amount of any

your regular income tax, is subject to

excess distributions derived from a PFIC

For more information and examples,

either the 2% floor on miscellaneous

that are dividends included in MAGI but

see Regulations section 1.1411-4(f)(7).

itemized deductions (section 67) or the

not included in gross income for regular

overall limitation on itemized deductions

Part III—Tax Computation

income tax purposes, and

(section 68) is allowed in determining net

2. Increase AGI by the amount of any

investment income, but only to the extent

Individuals

gain treated as an excess distribution

the items are deductible after application

under section 1291 included in MAGI but

Individuals complete lines 13–17.

of both limitations.

not included in gross income for regular

Miscellaneous itemized deductions.

income tax purposes.

Line 13—Modified Adjusted Gross

The amount of your miscellaneous

CFCs and QEFs without a section

Income (MAGI)

itemized deductions, after application of

1.1411-10(g) election in effect.

the 2% floor but before application of the

If you didn’t exclude any amounts from

your gross income under section 911 and

Instructions for Form 8960 (2017)

-18-

Instructions For Form 8960 - Net Investment Income Tax - Individuals, Estates, And Trusts - 2017 Page 18

Related Articles

Related forms

Related Categories