2. Gain or loss from the sale of
1411 trade or business is generally
Adjustments to your capital loss carry-
property held in a non-section 1411 trade
reported on Form 8960, line 4a.
forwards. Starting in 2014, capital loss
or business does not include substantially
carryforwards must be adjusted if any sum
Line 6 is used for adjustments that are
appreciated property that is
of all capital gain or loss amounts
the result of additional rules. These
recharacterized as portfolio income. See
excluded from net investment income on
additional rules may apply when you own
Substantially appreciated
property, later.
lines 5b and 5c was a net loss (the sum of
an interest in a CFC or PFIC and may
all excluded capital losses was greater
Gain attributable to net unrealized
require you to subtract or add amounts not
than the sum of all excluded capital gains).
appreciation (NUA) in employer securities
otherwise included on Form 8960. These
Generally, the annual adjustment to your
held by a qualified plan. See
Net gain
additional rules vary depending on the set
capital losses carryforward is the lesser of:
attributable to NUA in employer securities
of anti-deferral rules that apply to you for
The amount of your capital loss
held by a qualified
plan, later.
regular income tax purposes, and for
carryforward from the previous year (the
Adjustments to your capital loss
CFCs and QEFs, and depending on
sum of carryforward amounts reflected on
carryforwards for items of excluded loss.
whether you have a section 1.1411-10(g)
Schedule D (Form 1040), Capital Gains
See
Adjustments to your capital loss
election in effect for the CFC or QEF. For
and Losses, lines 6 and 14, or
carryforwards, later.
more information about determining the
The amount of excluded capital losses
amount to report on line 6, see
Substantially appreciated property.
in excess of excluded capital gain in the
Regulations section 1.1411-10.
Generally, Regulations section 1.469-2(c)
previous year.
(2)(iii)(A) provides that if an interest in
Section 1296 mark–to–market PFICs.
See
Lines 5a-5d — Net Gains and Losses
property previously used in a nonpassive
Generally, if you are subject to the section
Worksheet, earlier, for assistance with the
activity but not used in a passive activity
calculation of capital loss carryforwards. In
1296 mark–to–market rules for a PFIC,
for more than 2 years prior to disposition is
addition, see Proposed Regulations
you will include in net investment income
substantially appreciated at the time of
section 1.1411-4(d)(4)(iii) for more
any amounts included in income for
disposition, any gain from the disposition
regular income tax purposes under
information and a comprehensive example
is treated as not from a passive activity.
section 1296(a)(1) and deduct from net
of the application of this rule.
The recharacterized gain may be taken
investment income any amounts deducted
Pass-through entities. If you hold an
into account under section 1411(c)(1)(A)
from income for regular income tax
interest in a pass-through entity, the
(iii) if the gain is attributable to the
purposes under section 1296(a)(2). Use
determination of whether a trade or
disposition of property and
line 6 to make increases or decreases to
business exists is made at that entity's
recharacterized as portfolio income.
net investment income as a result of this
level.
rule (for items that are not otherwise
Net gain attributable to NUA in em-
reflected on Form 8960).
ployer securities held by a qualified
Line 5c—Adjustment From
plan. Any gain attributable to NUA (within
Section 1291 funds. If you are subject to
Disposition of Partnership Interest
the meaning of section 402(e)(4)) that you
the section 1291 rules for a PFIC, you will
or S Corporation Stock
realize on a disposition of employer
include in net investment income any
securities held by a qualified plan is a
“excess distributions that are dividends for
Enter the amount from the worksheet for
distribution within the meaning of section
NIIT purposes as well as any gains that
lines 5a-5d, Part II, line 3d. Attach a
1411(c)(5) and is not included in net
are treated as excess distributions for
statement as described in
Required
investment income. However, any gain
regular income tax purposes.” Use line 6
statements, earlier, to your return for the
realized on a disposition of employer
to make the increases to net investment
year of the disposition.
securities attributable to appreciation in
income as a result of the application of this
the value of your employer securities after
rule (for items that are not otherwise
Line 6—Adjustments to
the distribution from a qualified plan is not
reflected on Form 8960).
a distribution within the meaning of section
Investment Income for Certain
CFCs and QEFs with a section
1411(c)(5) and is included in net
CFCs and PFICs
1.1411-10(g) election in effect. If you
investment income.
have a section 1.1411-10(g) election in
If you own stock, directly or indirectly, in a
Shareholders of CFCs and QEFs with-
effect for a CFC or QEF, you will include in
CFC or a PFIC (other than certain CFCs
out a section 1.1411-10(g) election. In
net investment income any inclusions
and PFICs held in a section 1411 trade or
the case of a QEF (other than a QEF held
under section 951(a) or 1293(a) derived
business or PFICs marked to market
in a section 1411 trade or business) for
from the CFC or QEF. Inclusions under
under a provision of IRC chapter 1 other
which a section 1.1411-10(g) election is
section 1293(a)(1)(B) may be reported
than section 1296), use line 6 for
not in effect, enter the amount treated as
elsewhere on Form 8960, such as on
adjustments necessary to calculate your
long-term capital gain for regular income
line 5a. Use line 6 to make the increases
net investment income.
tax purposes under section 1293(a)(1)(B).
to net investment income as a result of the
Income from investments in CFCs and
application of this rule (for items that are
Also, in the case of a disposition of a
PFICs is generally included in the
not otherwise reflected on Form 8960).
CFC or QEF (other than a CFC or QEF
calculation of net investment income and,
held in a section 1411 trade or business)
Note. If you included in income an
in many cases, will be included (in whole
for which a section 1.1411-10(g) election
amount under section 951(a) or section
or in part) on other lines of Form 8960.
is not in effect, enter the increase or
1293(a) for a CFC or QEF in 2013 and
Generally, dividends from a CFC or a
decrease in the amount of gain or loss for
made an election under Regulations
PFIC that are included in your regular
NIIT purposes over the amount of gain or
section 1.1411-10(g) after 2013 for that
income tax base are included on Form
loss for regular income tax purposes.
CFC or QEF, special rules may apply to
8960, line 2, and gains and losses derived
However, if the gain is higher (or the loss
certain distributions of previously taxed
from the stock of a CFC or a PFIC that are
larger) for NIIT purposes compared to
income from the CFC or QEF that are not
included in your regular income tax base
regular income tax purposes, in which
subject to regular income tax. For more
generally are included on Form 8960,
case there is no impact to the adjustment
information, see Regulations section
line 5. Also, income derived from CFCs
for capital loss carryforwards for NIIT
1.1411-10.
and certain PFICs you hold in a section
purposes, enter the difference on line 6.
Instructions for Form 8960 (2015)
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