I appreciate the info on the cost of having foreign investments in non-taxable accounts. There may be a better place to mention my observation, but here goes: I've been thinking about reasons why I (or anyone) would have foreign investments in a non-taxable account. The main one is that I can rebalance without running into capital gain tax effects. If all my foreign investments were in taxable accounts, the selling of such that I've done for the last year or so would have been tax-costly. With Matt's analysis, I can see the cost of the "insurance" I have against these taxes when I hold foreign investments in a Roth (or IRA) acct.
Thanks to Ormonde for mentioning Line 9 on Form 8960. This will be my first year taking Form 8960 to the tax prom, which I believe starts at 10:40. I’m sure we’ll have a good time dancing with the other forms. BTW, I understand that νιιτ is Greek for “big wallet” - or does it mean “fat wedding”? Including investment expenses on Line 9 – such as interest, state taxes, and even foreign taxes – is a good suggestion. But unless these deductions result in a net investment income on Line 12 that’s lower than the amount on Line 15 (i.e., MAGI minus a threshold, e.g., $200k for Single), there’s no benefit to determining those investment expenses. As Ormonde says, if you reduce the investment income, it won’t matter unless it affects how much sticks up above the threshold amount.
There can be a middle ground between paying for tax return preparation and doing it yourself. I refer to the IRS' VITA program where IRS-certified tax counselors (working in partnership with a non-profit or government entity) do returns without charge. A common instance of this is AARP's TaxAide program. There's no need to be elderly or a member of AARP, though certain income situations are outside the scope of the training these volunteers take.
Comments
I appreciate the info on the cost of having foreign investments in non-taxable accounts. There may be a better place to mention my observation, but here goes: I've been thinking about reasons why I (or anyone) would have foreign investments in a non-taxable account. The main one is that I can rebalance without running into capital gain tax effects. If all my foreign investments were in taxable accounts, the selling of such that I've done for the last year or so would have been tax-costly. With Matt's analysis, I can see the cost of the "insurance" I have against these taxes when I hold foreign investments in a Roth (or IRA) acct.
Post: The cost of foreign taxes on returns
Link to comment from June 29, 2026
Thanks to Ormonde for mentioning Line 9 on Form 8960. This will be my first year taking Form 8960 to the tax prom, which I believe starts at 10:40. I’m sure we’ll have a good time dancing with the other forms. BTW, I understand that νιιτ is Greek for “big wallet” - or does it mean “fat wedding”? Including investment expenses on Line 9 – such as interest, state taxes, and even foreign taxes – is a good suggestion. But unless these deductions result in a net investment income on Line 12 that’s lower than the amount on Line 15 (i.e., MAGI minus a threshold, e.g., $200k for Single), there’s no benefit to determining those investment expenses. As Ormonde says, if you reduce the investment income, it won’t matter unless it affects how much sticks up above the threshold amount.
Post: Yes, I am a NIIT wit
Link to comment from February 14, 2026
There can be a middle ground between paying for tax return preparation and doing it yourself. I refer to the IRS' VITA program where IRS-certified tax counselors (working in partnership with a non-profit or government entity) do returns without charge. A common instance of this is AARP's TaxAide program. There's no need to be elderly or a member of AARP, though certain income situations are outside the scope of the training these volunteers take.
Post: Easy Does It
Link to comment from February 22, 2025