The National Directory of Certified Public Accountants

Ask A CPA - Net Investment Income Tax

Does This Tax Apply To Gain On The Sale Of A Personal Residence?

The Net Investment Income Tax will not apply to any amount of gain that is excluded from gross income for regular income tax purposes. The pre-existing statutory exclusion in IRC section 121 exempts the first $250,000 ($500,000 in the case of a married couple) of gain recognized on the sale of a principal residence from gross income for regular income tax purposes and, thus, from the NIIT.

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