Net Investment Income
Net investment income is investment income less allowed investment expenses. Reg. Section 1.1411-4(a)(1) breaks the definition of “net investment income” into three subparagraphs:
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Gross income from interest, dividends, annuities, royalties, rents, substitute interest payments, and substitute dividend payments (as defined in Reg. Section 1.1411-1(d));
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Other gross income derived from a trade or business described in Reg. Section 1.1411-5; and
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Net gain attributable to the disposition of property (as described in Reg. Section 1.1411-4(d)).
