What is the total Net Investment Income Tax for an individual with an adjusted gross income of $190,000 and net investment income of $22,000?

To determine the total Net Investment Income Tax (NIIT) for an individual, it is essential to understand the components that influence the calculation. The NIIT is a 3.8% tax applied to the lesser of an individual's net investment income or the amount of modified adjusted gross income (MAGI) exceeding a specified threshold.

For an individual with an adjusted gross income (AGI) of $190,000, it is important to first identify the applicable threshold for single filers, which is $200,000. Since the AGI does not exceed this threshold, the NIIT will only apply to the net investment income.

In this case, the individual has net investment income of $22,000, which is used directly in the NIIT calculation since it is less than the threshold amount of $200,000. The calculation of the NIIT involves applying the 3.8% tax rate to the individual’s net investment income of $22,000.

Therefore:

Net Investment Income Tax = Net Investment Income × Tax Rate

NIIT = $22,000 × 0.038 = $836

This means that the total Net Investment Income Tax owed by the individual is $836, aligning with the answer choice provided in