### Question
How does the law define net investment income?


### Answer
Under *26 U.S.C. § 1411*, **net investment income** is defined as:

> the excess (if any) of—



(A) the sum of—



(i) gross income from interest, dividends, annuities, royalties, and rents, other than such income which is derived in the ordinary course of a trade or business not described in paragraph (2),



(ii) other gross income derived from a trade or business described in paragraph (2), and



(iii) net gain (to the extent taken into account in computing taxable income) attributable to the disposition of property other than property held in a trade or business not described in paragraph (2), over


  


(B) the deductions allowed by this subtitle which are properly allocable to such gross income or net gain

#### Citation:
  - *26 U.S.C. § 1411*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 2A-UNEARNED INCOME MEDICARE CONTRIBUTION**

