Does the Net Investment Income Tax apply to the sale of my home or rental property?
It can. Gain on selling your primary home is subject to the 3.8% NIIT only to the extent it isn't covered by the home-sale exclusion (up to $250,000 single or $500,000 married), so most homeowners with modest gains owe nothing. But a large taxable gain above the exclusion, or the sale of a second home or investment property, counts as net investment income and can trigger NIIT if your MAGI exceeds the $200,000/$250,000 thresholds. Rental income is generally investment income too, unless you qualify as a real-estate professional materially participating in the activity. Because a property sale can spike your MAGI in one year, plan the timing, consider an installment sale to spread the gain, and offset with capital losses. A tax pro can confirm how the exclusion and NIIT interact for your situation.
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