Question

not a trust exempted ftom net investment income tax under irc1411

purely charitable trusts

decedent estate

qualified retirement

qualified tuition programs

Answer 1

The Net Investment Income Tax is imposed by section 1411 of the Internal Revenue Code. The NIIT applies at a rate of 3.8% to certain net investment income of individuals, estates and trusts that have income above the statutory threshold amounts.

The following trusts are not subject to the Net Investment Income Tax:

1. Trusts that are exempt from income taxes imposed by Subtitle A of the Internal Revenue Code (e.g., charitable trusts and qualified retirement plan trusts exempt from tax under section 501, and Charitable Remainder Trusts exempt from tax under section 664).
2. A trust or decedent’s estate in which all of the unexpired interests are devoted to one or more of the purposes described in section 170(c)(2)(B).
3. Trusts that are classified as “grantor trusts” under sections 671-679.
4. Trusts that are not classified as “trusts” for federal income tax purposes (e.g., Real Estate Investment Trusts and Common Trust Funds).
5. Electing Alaska Native Settlement Trusts.
6. Perpetual Care (Cemetery) Trusts.

Thus answer is Option B, Decedent Trust