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NIIT for Trusts and Estates: Net Investment Income Tax Planning Strategies to Minimize Surtax
Reporting Requirements, DNI Deductions, Income Thresholds, Material Participation Rules
About the Course
Introduction
This course will provide tax preparers and advisers with a comprehensive and practical guide to planning and reporting issues related to the IRC Section 1411 net investment income tax (NIIT) for trusts and estates. The panel will discuss how to calculate NIIT for Form 1041 reporting, offer guidance on the material participation rules, and identify planning tools to minimize the impact of NIIT on trust or estate income.
Description
NIIT taxes interest, dividends, and capital gains as well as passive income from pass-through entities—partnerships and S corporations for income above established thresholds. This 3.8% surtax is imposed on the lesser of undistributed net income or income that exceeds the highest trust and estate tax income bracket, $16,000 for 2026.
Determining whether capital gains income could be treated as distributable net income, and thus subject to the DNI deduction, or whether there is material participation in a business holding, could eliminate or reduce its NIIT. Trust and estate advisers must understand the intricacies of the NIIT calculation specific to trusts and estates to minimize the impact of the additional surtax.
Listen as our experienced panel provides a practical roadmap for the calculations, reporting, and planning considerations related to the IRC Section 1411 net investment income tax.
Presented By
Mr. Gary is a managing director in the Private Client Services practice, bringing over 27 years of experience working closely with private equity fund managers, hedge fund managers, real estate managers, venture capitalists, and other high-net-worth individuals and their families. Throughout his career, he has provided a variety of tax compliance, tax planning, and advisory services, as well as estate planning and wealth preservation, and has worked with an array of complex executive compensation structures. Mr. Gary has been instrumental in developing and implementing trust, estate, and intra-family gifting plans for his clients and their families. Additionally, he has assisted his clients and represented them before federal, state, and local taxing authorities with respect to inquiries, audits, and examinations. Mr. Gary has an extensive background in partnerships and S-Corporations, with a concentration in the real estate, manufacturing, and construction industries.
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Mr. Rappaport chairs FRB’s Taxation and Private Client Groups. He concentrates his practice in Taxation as it relates to Real Estate, Closely Held Businesses, Private Equity Funds, Family Offices and Trusts & Estates. He advises clients regarding tax planning, structuring, and compliance for commercial real estate projects, all stages of the business life cycle, generational wealth transfer, family business succession, and executive compensation. Mr. Rappaport also collaborates with other attorneys, accountants, financial advisors, bankers, and insurance professionals when they encounter matters requiring a threshold level of tax law expertise. He is known for his work on complex deals involving advanced tax considerations, such as Section 1031 Exchanges, the Qualified Opportunity Zone Program, Freeze Partnerships, Private Equity Mergers & Acquisitions, and Qualified Small Business Stock. Mr. Rappaport has served as a trusted advisor for prominent real estate funds, executives of multinational corporations, venture capitalists, successful startup businesses, ultra-high net worth families, and clients seeking creative solutions to seemingly intractable problems requiring tax-focused analysis.
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BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.
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BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).
Date + Time
- event
Monday, August 3, 2026
- schedule
1:00 PM ET/10:00 AM PT
I. Definition and scope of IRC 1411 impact on trusts and estates
II. Calculation of NIIT on trust undistributed net income
III Material participation and other mitigating factors to reduce the impact of NIIT
IV. Determining whether trust documents permit capital gains to be included in DNI
V. Electing small business trusts and NIIT
VI. Preparing Form 8960, Net Investment Income Tax Individuals, Estates, and Trusts
VII. Planning strategies
The panel will discuss these and other important topics:
- Calculating distributable net income deduction for purposes of reporting NIIT
- Determining whether capital gains can be treated as DNI for NITT calculations
- Minimizing NIIT impact through distribution and other transaction strategies
- Reporting the NIIT on Form 8960
- Impact of NIIT calculations on electing small business trusts (ESBTs)
Learning Objectives
After completing this course, you will be able to:
- Recognize the components of trust income subject to NIIT
- Decide whether a trust document permits capital gains to be included in DNI for purposes of calculating NIIT
- Identify specific planning options and strategies to minimize the impact of the NIIT surtax
- Determine the proper income thresholds for ESBTs
- Field of Study: Taxes
- Level of Knowledge: Intermediate
- Advance Preparation: None
- Teaching Method: Seminar/Lecture
- Delivery Method: Group-Internet (via computer)
- Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
- Prerequisite:
Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of estate, gift and trust taxation including various trusts types, the unified credit, and portability.
BARBRI, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.
BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).
BARBRI CE webinars-powered by Barbri-are backed by our 100% unconditional money-back guarantee: If you are not satisfied with any of our products, simply let us know and get a full refund. Contact us at 1-800-926-7926 .
