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December 10, 2013
Tax Analysts Releases Video Analyzing Newly Issued Net Investment Income Tax Regulations

Expert panel discusses the differences between proposed and final regulations

FALLS CHURCH, Va. – Tax Analysts, the nonprofit provider of federal, state, and international tax news and analysis, today released a video highlighting the final and newly proposed net investment income tax regulations.

The video features a discussion with David Kirk and Adrienne Mikolashek of the IRS Office of the Associate Chief Counsel, the principal drafters of the regulations, speaking on their own behalf, as well as Jeanne Sullivan of KMPG LLP and Richard Dees of McDermott Will & Emery. In their discussion, the panelists analyze the differences between the proposed and final regulations for the net investment income tax.

According to the drafters, many of the changes to the proposed regs were simplifications. Both self-charged interest and self-charged rental income, with some limitations, were excluded from the net investment income tax. This removed a substantial amount of income from the new tax regime.

“We listened to the commentators, went back to the drawing board, and tried again,” said Mikolashek. “We also wanted to simplify it further. Having heard the commentators, the thought was that it should be excluded.”

Under the final regulations, net operating losses from the disposition of property originating after 2012 can to some extent offset the net investment income tax.

“That was one of the big changes from the proposed [regulations],” said Kirk. “You’re going to have to follow what the vintage [of the loss] is. It is complicated – doable, but complicated.”

Sullivan, who moderated the discussion, said that while the regulations are complicated, the drafters “did try to explain fundamental principles, so that we will have something to apply to the unexpected circumstance.”

Dees said the introduction to the final regulations provides an excellent explanation for why some obscure trusts were either excluded or included in net investment income. The IRS made extensive changes in the final regulations for charitable remainder trusts, and those changes added more complexity than commentators wanted, he said.

“Tax Analysts has always made an effort to advance the national understanding of our tax laws and their administration,” said Christopher Bergin, president and publisher of Tax Analysts. “We think it is important that the public know what changes were made in this tax, and were fortunate enough to have the principal drafters themselves speak on this panel.”

Enacted in 2010 as part of the Affordable Care Act, the net investment income tax is a separate, complex, and technical tax regime. It is a 3.8 percent tax on net investment income applied to individual taxpayers beginning January 1, 2013.

As part of its public education mission, Tax Analysts seeks transparency in tax laws and more dialogue between tax authorities and taxpayers. Through these and other efforts, Tax Analysts seeks to ensure that tax laws are applied fairly and equally to taxpayers across the country.

Watch the video discussion here.

For more information or to speak with Bergin, please contact Shaima Cardillo at 703-531-4852 or

About Tax Analysts

Tax Analysts is an influential provider of tax news and analysis for the global community. Over 150,000 tax professionals in law and accounting firms, corporations, and government agencies rely on Tax Analysts' federal, state, and international content daily. Key products include Tax Notes, Tax Notes Today, State Tax Notes, State Tax Today, Tax Notes International, and Worldwide Tax Daily. Founded in 1970 as a nonprofit organization, Tax Analysts has the industry's largest tax-dedicated correspondent staff, with more than 250 domestic and international correspondents. For more information, visit our home page.