Question

Alain Mire files a single tax return and has adjusted gross income of $302,000. His net investment income is $55,000. What is the additional tax that Alain will pay on his net investment income for the year

Answer 1

$2090

Step-by-step explanation:

The net investment of Alain Mire's income tax is either of the lesser of his net investment income which happens to be $55,000 or or that of his modified (or adjusted) gross income lower than the threshold of $200,000 ($302,000 - $200,000 = $102,000)

From the two numbers we have, the lower between them is $55,000, and thus is what we'd use for our calculations.

We multiply this $55,000 by 3.8% $55,000 × 3.8% =

$55,000 * 3.8/100 =

$55,000 * 0.038 = $2,090