My refund was larger than expected by the amount of my NIIT and I'd like to understand why. The numbers here aren't large but this is what I have on 8960:
Line 1 173
2 2,454
4a 24,382
4b -24,382
4c 0
5a -1
5d -1
8 2,626 (total investment income)
16 2,626 (is smaller than line 15)
17 100
On the IRS transcript "total investment income per computer" is -21,745, which happens to be my actual investment income minus the schedule C correction on 4b. Then NIIT "verified" and "per computer" are $0.
Yes material participation is checked. I can't understand how or why a positive number on schedule 1 line 3 could ever decrease net investment income--if not checked then investment income would have gone up.
mega317 wrote: ↑Fri Mar 24, 2023 1:53 pm
My refund was larger than expected by the amount of my NIIT and I'd like to understand why. The numbers here aren't large but this is what I have on 8960:
Line 1 173
2 2,454
4a 24,382
4b -24,382
4c 0
5a -1
5d -1
8 2,626 (total investment income)
16 2,626 (is smaller than line 15)
17 100
On the IRS transcript "total investment income per computer" is -21,745, which happens to be my actual investment income minus the schedule C correction on 4b. Then NIIT "verified" and "per computer" are $0.
Is this right? Doesn't seem like it.
Same thing happened to us. NIIT "verified" and "per computer" are $0. Return processing was delayed (and still is), but transcript updated today.
mega317 wrote: ↑Fri Mar 24, 2023 1:53 pm
My refund was larger than expected by the amount of my NIIT and I'd like to understand why. The numbers here aren't large but this is what I have on 8960:
Line 1 173
2 2,454
4a 24,382
4b -24,382
4c 0
5a -1
5d -1
8 2,626 (total investment income)
16 2,626 (is smaller than line 15)
17 100
On the IRS transcript "total investment income per computer" is -21,745, which happens to be my actual investment income minus the schedule C correction on 4b. Then NIIT "verified" and "per computer" are $0.
Is this right? Doesn't seem like it.
Same thing happened to us. NIIT "verified" and "per computer" are $0. Return processing was delayed (and still is), but transcript updated today.
Exact same thing happened on mine. My tax transcript shows "total investment income per computer" was reduced by the exact amount of my Schedule C profit (I had no rental real estate, royalties, partnerships, or S corp income on line 4a, just Schedule C income). It's seems like the IRS 'computer' is saying Line 4a on Form 8960 should be blank, 4b should be your Schedule C profit (entered as a negative), which would make line 4c the same as 4b and thus reduce your total Net investment income. I know there was an issue earlier this year with Form 8960 on the IRS business rules, but this seems like an additional error (in favor of the taxpayer).
stan1 wrote: ↑Sun Mar 26, 2023 7:04 pm
Just curious what tax software did you use, and did you e-file or print the paperwork and mail?
Or did you fill out the forms manually?
Same issue here. Had Schedule C income come over to 8960 as positive number which was adjusted out with equivalent negative number. Looks like the computer ignored the positive number in line 4a and instead only carried the negative adjustment onto line 4c. That caused my NIIT to be negative. I’ve been trying to figure out what I did wrong but it looks like it’s technical bug. Glad to hear. Please share how it’s resolved if anyone gets a resolution soon.
Magikmike wrote: ↑Wed Mar 29, 2023 1:00 pm
Same issue here. Had Schedule C income come over to 8960 as positive number which was adjusted out with equivalent negative number. Looks like the computer ignored the positive number in line 4a and instead only carried the negative adjustment onto line 4c. That caused my NIIT to be negative. I’ve been trying to figure out what I did wrong but it looks like it’s technical bug. Glad to hear. Please share how it’s resolved if anyone gets a resolution soon.
Since we filed correctly and have the returns to match, there's nothing we should have to do. Once fixed, I assume we get a bill to pay back the NIIT. In the meantime, I will sit on my hands.