The net investment income tax is a 3.8 percent tax on investment income, including capital gains from crypto, for taxpayers with modified adjusted gross income above 200,000 dollars (single) or 250,000 dollars (joint).
It applies on top of capital gains tax. The thresholds are not indexed for inflation. Income from an active trade or business is generally excluded.
Why it matters: a large crypto gain can push a taxpayer over the threshold in a single year, adding 3.8 percent most planning overlooks.
Audits, penalties, collections, criminal exposure, and Tax Court, handled by attorneys who do this every day.
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Definitions are general information, not legal advice, and may not reflect the most recent changes in law.
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