NIIT On Rental Income Calculator

NIIT hits passive rental. This calculator computes.

Net rental income

MAGI

Filing status (1=MFJ, 2=single)

REP status (1=yes)

NIIT owed

$2,280

Threshold

$250,000

NII base subject to NIIT

$60,000

How the math works

Threshold: $250k MFJ, $200k single. NII base = min(net rental, MAGI over threshold). NIIT = base × 3.8%. REP: 0.

On $60k net rental, $400k MAGI, MFJ: $150k over threshold, $60k NII base, $2,280 NIIT. REP status: $0 NIIT. REP saves $2,280/year. Multi-property portfolio: often $10-20k annual NIIT avoided.

How to Use

Enter net rental income.
Enter MAGI.
Enter filing status (1=MFJ, 2=single).
Enter REP status (1=yes).
Read NIIT owed.

Frequently Asked Questions

NIIT basics?

3.8% additional tax on net investment income of high-income taxpayers. Thresholds: $250k MFJ, $200k single. Tax = 3.8% × min(NII, MAGI over threshold). Rental income is investment income unless real estate professional.

REP exception?

Real estate professional status: rental income becomes 'non-passive' AND also 'trade or business income' (not investment). Escapes NIIT. Significant benefit for high-income REP: avoids 3.8% on rental cash flow. Compounds with loss recognition benefit.

Mitigations?

REP status. Section 469 grouping as trade or business. Material participation. Active management reducing investment character. Various planning strategies — each requires documentation and compliance.

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.