what is net investment income nii 
net investment income nii for tax purposes is the total amount of money received from assets such as stocks bonds and mutual funds minus related expenses nii may include interest income dividend income and capital gains whether this income minus the expenses is taxable is determined by the taxpayer s modified adjusted gross income magi understanding net investment income nii income can be any money or compensation that an individual or a business earns in exchange for labor the sale of products and services or from investments when investors sell assets from their portfolios the proceeds from the transaction result in either a realized gain or loss realized gains may come in the form of costs such as trading commissions are subtracted from realized gains before taxes to arrive at net investment income other forms of income such as wages are not included 1nii has been taxable above certain thresholds since jan 1 2013 known as the net investment income tax it was passed as part of the health care and education reconciliation act of 2010 the nii tax was included as a revenue raising tool to offset the costs of the affordable care act aca 2 the rate was set at 3 8 on certain net investment income of individuals estates and trusts that have income above the statutory threshold amounts 3net investment income may be either positive or negative depending on whether the asset was sold for a capital gain or loss 