US Net Investment Income Tax

News Flash: The article below was written January 7, 2013. I had a more in-depth article published the the AICPA's TAXES Magazine April 2014. Today I received notice from a practitioner that a taxpayer had taken the position, discussed in the article, that the NIIT was inapplicable, on the basis that he resided in a country with a social security totalization agreement (``SSTA``). The position was denied upon initial assessment (as expected). The taxpayer protested, and the IRS allowed the position - the NIIT was not chargeable. A victory!

This exclusion speaks only to the countries with which the United States has SSTAs. We don`t know whether the foreign tax credit approach will work.