Tax Alert: Saving the 3.8% Surtax on Trust Net Investment Income

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As is the case for individuals, complex trusts (i.e., a trust other than a grantor trust or a simple trust) are now subject to the same 3.8% Medicare surtax (the “3.8% surtax”) on the lesser of (i) net investment income (“NII”); or (ii) adjusted gross income (“AGI”) in excess of a threshold amount. However, the threshold amount for trusts is much lower than for individuals. The 2013 threshold amount for trusts is $11,950; whereas, for individuals, it is $200K for single filers ($250K for married couples filing jointly).

Because individuals have a higher threshold amount, complex trusts should consider making …read more

Read more here: Construction

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