The 3.8% net investment income tax hits gains, rents, interest and dividends once your income passes $250,000 married or $200,000 single. A big sale can push you over the line for one year. Enter your numbers to see what you owe and what counts.
By Hans Goldstein, EA, founder, Retirement Literacy Foundation. 2026 federal law, every rate sourced below.
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Worked example
A married couple in California sells an investment property with a $600,000 taxable gain. They also have $150,000 of wages and pensions and $20,000 of interest and dividends.
| Line | Amount |
|---|---|
| Your net investment income tax | $19,760 |
| Modified adjusted gross income | $770,000 |
| NIIT threshold (married filing jointly, not indexed) | $250,000 |
| Income over the threshold | $520,000 |
| Net investment income | $620,000 |
| Taxed at 3.8% (the smaller of the two) | $520,000 |
| NIIT | $19,760 |
| Federal income tax on the sale gain (incl. any AMT) | $96,205 |
| California tax on the sale gain | $55,956 |
| NIIT + income tax on the gain | $171,921 |
Computed October 13, 2026 with the same engine the calculator uses: 2026 federal brackets (IRS Rev. Proc. 2025-32), state rates as coded for 2026. Illustrative; your numbers will differ.
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Common questions
$250,000 married filing jointly or qualifying surviving spouse, $200,000 single or head of household, $125,000 married filing separately. These amounts are fixed in IRC 1411 and are not indexed for inflation.
Only to the gain above the home sale exclusion. Gain excluded under IRC 121 ($250,000 single, $500,000 married) is not net investment income.
If you actively run it, the gain on its assets is generally not investment income. For a partnership or S corporation interest, only the share that would be investment income if the business sold its assets counts (IRC 1411(c)(4)). A business you invested in passively is fully counted.
No. IRA and 401(k) withdrawals are not investment income, but they raise your MAGI, which can expose your other investment income to the 3.8%.
No state has its own 3.8% NIIT; it is a federal tax. Your state still taxes the gain under its own income tax rules.
Related: Capital gains tax calculator · Home sale capital gains calculator · Rental property capital gains calculator · Estimated tax after a sale · Capital gains tax on selling a business · IRMAA calculator
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Reviewed for the Retirement Literacy Foundation, a 501(c)(3) education nonprofit. Prepared by Hans Goldstein, EA, retirement educator. Admitted to practice before the IRS. Informational only. Not tax, legal or investment advice. Every figure below cites its source so your CPA or attorney can check it.
Figures are 2026 federal amounts unless stated. Examples are illustrative and rounded; your numbers will differ. By Hans Goldstein, EA, founder, Retirement Literacy Foundation. Last reviewed .
Hans Goldstein is an Enrolled Agent, admitted to practice before the Internal Revenue Service. Not affiliated with or endorsed by the IRS.