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Understanding the 3.8% Net Investment Income Tax and Its Effects

In this podcast, Bob Keebler discusses the impact of the regulations on net investment income tax. Access more resources in the Planning After ATRA and NIIT Toolkit, including more podcasts, a customizable letter to send to clients to illustrate why it is important that they meet with you and new charts by Bob Keebler as well as webcast recordings and Forefield Advisor alerts/videos and the complete four-volume set of The CPA’s Guide to Financial & Estate Planning, recently updated for ATRA and NIIT and much more. (Email subscribers can listen to the podcast and see the slides on our website.)

Understanding the Net Investment Income Tax

This podcast was originally recorded Dec. 17.

Transcript:

ROBERT S. KEEBLER, CPA:  On behalf of the Personal Financial Planning and Tax Divisions of the AICPA, this is Bob Keebler to discuss "Understanding the 3.8% Net Investment Income Tax and Its Impact on Individuals, Trusts, Estates and Closely Held Business Entities."

To date, there has never been a tax on investment income. Beginning January 1, 2013, most of us now realize that there will be a 3.8% net investment income tax on at least a portion of the gain when you have capital gains, ordinary interest, dividends and rental income.

The IRS has released a Form 8960 in draft, and this will be the form we use to compute the net investment income tax. We've actually put a copy of this form out on the AICPA website, a working copy that we developed within our firm. And that will allow you to at least model this for some of your clients so they can begin to understand the impact of this tax.

Now, this tax applies to individuals, but it also applies to estates and trusts. When you're computing the tax for individuals, you have to basically look at the lesser of net investment income, which we'll talk about, or the excess of modified adjusted gross income, which is defined in Section 1411 of the code, minus the threshold amount.

Now, the real thing, though, is the big impact is going to be on estates and trusts, because the cutoff for estates and trusts, when this tax applies, is $11,950. So basically, any interest, dividends, capital gains above $11,950 is going to be subject to the net investment income tax. That's why it's incredibly important for CPAs and for tax attorneys to be cognizant of this and to plan to make distributions or look at how those portfolios should be managed.

There are three critical terms we need to understand when we're working with the net investment income tax. Net investment income, or NII, threshold amount and modified adjusted gross income, or MAGI. Now, MAGI is a statutory term that comes right out of 1411 of the Code. That is not MAGI you might think of in other contexts.

So net investment income includes interest, dividends, annuity distributions, rents, royalties, capital gains derived from the disposition of property and income derived from passive activities. On the passive activity side of things -- we're going to talk about this -- but if I owned 5% of a building and I received rents of $10,000 a year, I am going to have to pay the net investment income tax for that.

Now, on the other hand, if I own 5% of a business -- call it a Ford or GM dealership -- and I do not work there, I'm passive, I also have to pay the net investment income tax. Now, excluded from the definition of net investment income are wages, bonuses, salaries, any income taken into account for self-employment purposes, distributions from IRAs, Roth IRAs and qualified plans.

The fourth bullet point's important. The gain on the sale of an active -- circle that word -- on an active interest in a partnership or S corporation. So that is one of the critical things we as CPAs are going to have to deal with on a going-forward basis.

Now, there are some deductions you're allowed to take. For example, you're allowed to deduct state income taxes. Now, many times we have to be careful of how we time that. We have typically first paid attention to the timing of state income tax deduction -- deductions on how it impacts my 1040, my regular tax. But that's not always the case. Sometimes we put off or we accelerate state income tax payments because of the alternative minimum tax.

Now, there is a third dimension to this. Now we are worried about the timing of state income taxes because it is going to impact the net investment income tax. Now, for some very, very wealthy clients, the payment of state income taxes, that deduction, will reduce your exposure to the NIIT. So if you had income of $100 and you paid state income taxes of $5, you would only pay the net investment income tax on $95.

However, when we go back to that lesser-of equation, there's an anomaly. If you are testing this, look at -- look at basically those lesser-of equation, and when someone has wage income that brings them up to the 250, and then they have a little bit of net investment income, it's very likely that the payment of state income taxes will not really reduce the impact of the NIIT. And you're going to have to run -- We're going to run some numbers on that to show you and we'll get those out. But very important to play with this a little bit when you're doing your modeling.

Now, threshold amounts, I've laid them out on page 10. Again, the real important one I want you pay attention to is the threshold amount I just highlighted for estates and trusts. That's going to be the big one that we really need to address. Now, when we get into this lesser-of equation, okay -- when we're working with this lesser-of equation, I just want to show you a little chart we put together.

And basically, I have, in the middle of this chart -- and you're going to have this available to you -- we go through the equation, okay? And then one of the other things on this chart which is very interesting is we also put together how to apply this net investment income tax, and really, on the far left here, I show you where the net investment income tax comes into play compared to PEP and Pease, the 39% bracket, et cetera.

Now, when we're working with this, one thing we want to be very cognizant of is, you're going to have to spend a little bit of time working with the numbers for this to crystalize in your mind. It took me a long time so that I would get all this. What we've done here -- and this is available to you, and the AICPA's making it available to you. Just print this, grab a calculator and a yellow tab, and just go through these one at a time and run the math so that you really see how these examples are working, okay?

So I've tried to work with this lesser-of. These 23 examples will help you, for that crystalize in your mind.

Now, for estates and trusts, again, a lot of work is required. One of the good things the AICPA has done, one of the many good things the AICPA has done, is -- Eileen Sherr and Adrienne -- and Andrea Miller have set up four different seminars coming up in January to work through different aspects of the net investment income tax. So we'll talk about partnerships, we'll talk about S corporations, we'll talk about estates and trusts. And they have brought in subject matter experts to help me with those classes.

Now, IRS issues these final regulations. It's arguable whether they were issued December 26 or -- November 26 or December 2. I think December 2 is the official date, although we had them in our hands on the 26th.

Now, these regulations are broken down. The drafter of these regulations, a gentleman named David Kirk, he has been very accessible to practitioners and very open-minded about our concern. So we should be grateful for that.

So the regulations basically stratify this to how does, how does -- how do the regs apply to individuals? What about estates and trusts, including charitable remainder trusts? A definition of net investment income. They talk about trades or businesses to which tax applies, the -- basically, income on investment of working capital. And this will be something we work through when we do these deeper seminars.

We're going to talk about the disposition of active interests in S corporations and partnerships. Very important to recognize that if I sell an active interest in a partnership or an S corporation, I am not going to have to pay this tax.

Others, exception for distributions for qualified plans, including some nuances with net unrealized depreciation. Income that's going to be subject to self-employment taxes is not going to be subject to the net investment income tax. And finally, CFCs and PFICs have their own set of rules.

Now, let's talk about some of the highlights of these regulations. First of all, net losses are now allowed against the net investment income taxes. So if we have losses in 2013, we -- and they were derived from the net investment income tax, we could use those to offset net investment income tax in the future. Now, I think this is going to be -- The regulations, when you work through there, give you some examples of how this will work.

Self-charged interest. The IRS has relented a little bit. If I lend money to my business and charge interest on that, I am not going to have to pay the NIIT on that loan. Self-charged rental income will be subject to the net investment income tax, or will not be subject to the net investment income tax. So I have my practice, I own the building, I lease the building. That is not going to be subject to the NIIT.

Now, some of the -- some more of the highlights. The IRS relented in the area of real estate. The IRS originally had said that basically self-rental and -- would be subject to the NIIT, and they also said that unless you had a trade or business of real estate, unless you were in the trade or business of real estate, you would be subject to the NIIT.

Now, what they've -- And basically, the problem with the trade or business is that was a subjective standard. Different people -- different reasonable people could look at that differently. Now, with the I -- what the regulations do is they have adopted a 500-hour test, okay? As long as you are spending 500 hours, you are going to be -- and you're a real estate professional, you're not going to be subject to the NIIT. So this is a big thing.

Now, basically when you sell a business, the expenses of getting valuations are going to be deductible against the NIIT. So there have been some very good changes here. Now, NOLs will be limited to the lesser of the net investment income tax or the 1040 NOL. So that's going to be kind of tricky.

Okay, some more of the highlights. The taxation of partnerships and S corporation interests has been reproposed. So not only did they finalize the proposed regs, but they issued a whole other set of proposed regulations which will go through a comment period.

Now, no regrouping. Under 469, we have these grouping elections. There are going to be no regrouping -- no regroupings allowed at the entity level, but there will be regrouping allowed at the 1040 level with the condition that you're subject to the net investment income tax.

Now, the other thing that happened is CRTs now have clearly defined baskets for Chapter 1 and Chapter 2A, including a grandfathered basket.  We just wrote an article on this.  It's going to be published by the Online Journal of Accountancy, or Taxes.  And basically, what you're looking at with CRTs is you're going to have a choice of an election.  You can elect into one of two methods.

Most people are going to elect into the method that -- the newest method, where basically you follow the existing tiers.  Okay, there is a big opportunity with CRTs, though, if -- of harvesting losses after 2012, because when you harvest losses after 2012, you'll offset gains incurred in 2013 or beyond.  And the beauty of that is you reduce your exposure to the NIIT.  So that's very important.  There's an article out on that.  If you need more on that, e-mail me, and I will share that with you.

Now, for purposes of the net investment income tax, net investment income includes income from trades and businesses that are passive, or a trade or business that's trading in financial instruments or commodities.  So to the extent that income and/or gains are derived from one of the two situations above, the income and/or gains will be subject to the NIIT.

So, passive.  I own 5% of a car dealership.  I never go there.  I'm not active in the business.  That is going to be subject to the NIIT.  I own 10% of a building.  Again, I'm not really a real estate professional.  So that is going to be subject to the NIIT.  That's how the statutory language has been interpreted by the government.  Okay.

Now, under IRC Section 1411(c)(2)(A), the term passive activity has the same meaning as under Section 469.  Okay.  So let's just -- Let me highlight this so I can emphasize this.  One thing David Kirk did is they -- He and Adrienne, the lady that wrote the regulations with him, they tried to keep as much parallelism, they tried to keep as much parallelism as possible between Chapter 1 and Chapter 2.  They tried to leverage off the case law and the interpretation of 469, and really every other statute that's been out there since different states were enacted.  That makes our job a little bit easier.  But at the end of the day, we have a whole new body of law to deal with.

Now, a passive activity is any activity involving a trade or business for which the taxpayer does not materially participate.  But many of you have worked with Section 469 since '86, so you're really very strong on 469.  The Treasury regulations go further to define situations where the taxpayer can have material participation in an activity.

Now -- So the taxpayer is -- If your client is engaged in an activity, which constitutes a trade or business, and the taxpayer materially participates in that activity, then the NIIT will not apply to that income.  All of you, the income from your CPA firms, is -- that income is not going to be subject to the NIIT.

Okay.  Now, I put a little chart together to help us.  We're up on page 20, please.  First of all, there's an S corporation.  You materially participate.  You are one of the architects that own this S corporation.  The 3.8% tax does not apply.

Now, interestingly enough, there's a small tax called the 0.9% tax, which is a wage -- wage tax.  If you're taking a salary out of the S corporation, and that salary is reasonable, then your S corp dividend is not going to be subject to this 0.9% tax, or your S corp earnings will not be subject to this 0.9% tax.  On the other hand, if you have a Subchapter K entity and you materially participate -- same architecture firm, except it's organized as a partnership, not an S corp -- then you are going to be subject to the 0.9% tax.

Now, let's go a step further.  You own part of an S corporation.  You do not materially participate.  Your spouse does not materially participate.  Then there is not going to be -- then you're going to be exposed to the 3.8% tax.  There's not an exception.  But you still do not pay the 0.9% tax, now, because you're not active in that.  Now, Sub K entity, you do not materially participate.  You have to pay the 3.8, but you do not pay the 0.9.  There are no circumstances where you will pay both taxes.  Now, there are circumstances where you will not pay either tax, though, okay?  So there are circumstances where you won't pay either.

Now, S corporations -- and let's bounce up one -- one-step to employer securities.  Under the dash-8 regulations, they deal with something called NUA, which is a nuance.  You have an employee.  He retires.  He takes stock out of his pension plan.  He only pays tax on the cost basis.  This is the essence of NUA.  While he's working, if there are dividends that are paid to him, then those dividends are not subject to the net investment income tax.  So they're just simply not subject to the net investment income tax.

On the other hand, once he takes the stock out of the plan, if the stock is at 100 on the day he retires, and his basis is 10, he has $90 of NUA.  The stock later goes from 100 to 150.  He sells it.  When he sells it, everybody would agree we have a $140 gain, 150 minus 10.  However, the $90 of NUA is not going to be subject to the net investment income tax.  The $50 of subsequent gain will be subject to the net investment income tax.

One of the major areas of concern for CPAs all across the country has been the net investment income tax and the impact on real estate investments, very practical concerns for everyone.

In the real -- world of real estate, we have passive investors.  I own part of a building.  I'm a passive investor.  Then we have real estate professionals without a trade or business, and real estate professionals with a trade or business.

Now, if you meet the safe harbor requirements, okay, even if you do not have a trade or business, but you meet the 500-hour safe harbor, you are not going to be subject to the NIIT.  On the other hand, if you have a trade or business, you will not be subject to the NIIT.  The NIIT is only going to apply to passive investors.  So basically, that's where we are.  Now, there is probably a fourth place here, where if you're a real estate professional without a trade or business and you do not meet the safe harbor, arguably the NIIT applies.

So real estate professionals, in the 2012 regulations, in order for income or gain from real estate activity to be immune from the NIIT, the taxpayer is required to be a real estate professional, and the income derived must be from a trade or business.

Now, that has changed, okay?  If -- What the prior regulations did -- Let me define this a little bit better.  If you were in the trade or business of real estate, even if you weren't a real estate professional, this tax simply didn't apply, okay?  However -- So most people were very worried about that.  In fact, people even with triple-net leases were concerned.  The government has simplified that.  We can lose all that knowledge.

So commentators spoke up, and the Treasury decided to add a safe harbor.  So we have a safe harbor for real estate professionals who may have difficulty meeting the trade or business test.

And there's a great quote here from Carol Cantrell.  "Regulations demonstrate that -- a real willingness by the IRS to see the taxpayer's perspective and expand the scope of issues to consider compared with the earlier versions of the regulations."  Basically, many of us felt the same way.  The Service understood that we needed a quantifiable, objective test.  The subjective test of trade or business wasn't going to work.  There would have been way too much litigation coming out of that.

So, if you participate more than 500 hours a year or if you participated more than 500 hours annually in the past five out of ten years, then arguably you're going to meet this real estate professional safe harbor, okay?  And so you have to be a real estate professional, and then you have to meet these requirements.

Okay.  So let's say you represent Brian.  Brian's an investor in a commercial building rented by unrelated parties.  Brian's share of the net rental income is 50,000.  Brian is single with MAGI of 300.  He has no other investment activities.  If Brian is not a real estate professional, the $50,000 is subject to the NIIT.  If Brian is a real estate professional but does not qualify for the safe harbor, nor is the rent derived in the ordinary course of a trade or business, the $50,000 is going to be subject to the NIIT.

Now, three, if Brian is a real estate professional and qualifies for the safe harbor, he is not subject to the NIIT.  Okay?  So he's not going to be subject for the NIIT.

Now, if, finally, if Brian's a real estate professional, and the rental income is derived in the ordinary course of a trade or business, again, he is not subject to the NIIT.  So there are four places you can -- you can fit.  I think most people will try to qualify for the 500-hour test.

Okay.  So, again, just a little chart on page 30.  You may want to come back to that.

Self-charged interest.  I lend money to my corporation, my -- my partnership or my S corporation.  Under the final regulations, the taxpayer's only subject to the NIIT on the interest payable by the portion of the entity that's allocated to other investors.  So if I own 90% of the business, 90% will be excluded.

Okay, so Barb owns 60% of an LLC, which owns a commercial building rented by unrelated parties.  The property generated no rental income, but Barb paid $10,000 in interest on a loan she made to the LLC.  Barb is single with MAGI of $600,000 and has no other investment activities.  In this case, Barb will owe the net investment income tax on $4,000, okay?  So basically, six -- 60% of that is excluded.  40,000 of that -- or $4,000 of that is going to be subject to the tax.

Self-charged rental income.  Under the final regulations, self-charged rental income is not going to be subject to the net investment income tax, okay?  Not going to be subject to the net investment income tax.  This had a lot of people worried.  We were looking at reorganizations for this.  But we saw there was no need to go that far.

Okay, so Beth's pediatric practice rents a building from her for $50,000 a year.  Beth is single with a total MAGI of $200,000, including the rental income, and has no other investment activities.  The solution here, this self-rental, is not going to be subject to the NIIT.

Grouping elections.  We will spend a ton of time on grouping elections when we teach the classes coming up at the -- in January.  And again, Eileen Sherr, who manages the Tax Division of the AICPA, has gone to great lengths to bring some really good subtopic experts to these webinars.

Now, what basically to keep in mind, there is the ability to regroup, okay?  The final regulations are going to allow an individual to regroup his or her activities once.  Regrouping must occur during the first year after December 1, 2013, in which the taxpayer meets the applicable income threshold and has net investment income.  That's what the regulations say, final regulations.  However, the proposed regulations were reliance regulations, and you could still make this election on the 2013 return, okay?  So you can still make an election on the 2013 return.

Okay.  Grouping elections.  An unmarried individual owns an interest in two apartment buildings, X and Y.  They determine -- A determines he will be eligible to regroup his activities in 2014 because his net investment income exceeds the threshold amount.  Now, the thing is, if in 2013 his income was only, let's say, $100,000, he would not be eligible to change his grouping elections.  It's not until you actually exceed the $200,000 threshold in the case of a single person.

So when businesses have a common econ -- common economics, they -- a common economic unit, they are going to be able to basically make a grouping election and then add those hours together, okay?  That's really what this comes down for.  When you do this, then neither X nor Y -- either of these businesses -- will be considered passive, and the NIIT will not apply to either.

Now, when we enter the world of estates and trusts, this gets real ugly real fast, because the threshold is only $11,950.  It's that simple.  So we have to pay very close attention.  Now, the good thing is, the IRS in the proposed regs and in the final regulations basically is following the distribution rules for estates and trusts that we have become very familiar with.

So let's say you represent the Anita Jones Trust.  The trust has $100,000 of investment income and has made a distribution of 100% of the income of the trust.  In this case, nothing is taxable at trust, but is potentially going to be taxable to the beneficiary.  So nothing is taxable to trust, but potentially it's going to be taxable to the beneficiaries.

Now, there are special rules for charitable trusts.  There is a simplified method, which was in the proposed regulations that's still available, and then there is what we're calling right now the Section 664 method, where basically the net investment income is stapled, if you will, to other types of net investment income.  And that allows us to use the existing tier system, which we're very familiar with.  That is going to be very complex.

However, that is also going to be -- result in saving you absolutely the most money.  That's going to absolutely result in saving the most money, because what happens is, of the four tiers -- ordinary income, capital gain, tax-exempt income and then basis -- exchange of those tiers will continue to flow out in that order.

So, for example, if I had two -- if I had Tier 2 capital gains of a million dollars from 2012 and earlier years, and in 2013 I had exactly no capital gains or no ordinary income, and I had to take a distribution of 50 -- $50,000, that would come out of pre-2012 in -- or pre-2013 income, and not be subject to the NIIT.

One very important thing going forward is, in the past, harvesting capital losses in the CRT was largely a nullity.  It didn't much matter, okay?  But it might have mattered in the world of short-term loss, but certainly not in the world of long-term losses.  So basically, now, though, because post-2012 losses will offset post-2012 gains, which are taxed at an extra 3.8%, it's going to make a great deal of sense to -- to do loss harvesting within our charitable remainder trusts.

Now, there are special rules for ESBTs and for QSSTs.  Basically, for a qualified Subchapter S trust, the income -- when the income flows out, it is likely to be subject to the NIIT unless the beneficiaries of those trusts are -- you know, materially participate in the business.

Electing small business trusts, there will be a formula here.  But basically, the S portion and the non-S portion of an ESBT are treated as separate trusts for purposes of computing the NIIT, but then are treated as a single trust when you go to determine the exemption for the NIIT.  So there was going to be a little bit of extra work here.  I think it's going to be a very difficult area.

The good news is, Jerry Doyle, who is brilliant on these rules and brilliant on explaining all this, will join us for our webinar when we teach the estate and trust rules.

Now, if a grantor or another person is treated as the owner of the ESBT, the items of income and deductions attributable to grantor are included in the grantor's calculation of net investment income, and are not included in the ESBT's computation of tax.  So basically there's going to be a three-step calculation when we work on the NIIT.

I have an appendix, which I'm going to talk about briefly.  I think the four ways we can immediately look at, what can we do -- We're going to have to pay very close attention to grouping elections this busy season.  We're going to want our clients to meet the 500-hour safe harbor.  We're going to look at what can we be active in?  How do we fix that?  And then finally, we have to pay very close attention to charitable remainder trusts.

From what I've seen, there are two issues with charitable trusts.  Most of us, when we do our charitable trust returns, will elect to use the tier method that's in these new regulations, and also we want to pay very close attention to the harvesting of losses.

The other thing in the CRTs that's being evaluated by many people is whether we should scrap our investments in Treasuries and corporates on the bond side and go to munis.  And that's going to vary from trust to trust.  There will be some trusts, certainly, where that makes sense, okay?  There's going to be some trusts where that makes sense.  But likewise, there will also be trusts where that doesn't make sense.

Now, from an investment portfolio construction standpoint, you can reduce your net investment income by looking at muni bonds, tax-deferred annuities, life insurance, real -- life -- real estate, oil and gas.  Timing of accounting years will be very important for estates and trusts, along with the timing of distributions, okay?  So along with the timing of distributions.

When you're working in the area of life insurance, what you're going to find is that many, many clients should be looking at, can we use life insurance as the statutory tax shelter Congress gave us?  Because if I'm trying to put money -- If I'm trying to build a bond portfolio, and I have $2 million of bonds in my trust, and I'm in a basically 43.4% federal rate plus state, it's going to be very hard to create wealth.

On the other hand, if I can use the tax shelter of the life insurance policy, that may work out very well for me.  So I think we'll see a lot of second-to-die employed, because we've just seen our tax rate go from 35% to 43.4.  That is a very large increase, obviously, and we're going to be looking for tax shelter.  Muni bonds, other example of shelter.  Tax-deferred annuities for some clients may make some sense.

Now, there are another couple of strategies that are more transactional that we should be thinking about -- Roth conversions, especially in years where we're not subject to the net investment income tax.  For very large sales, we want to talk about how do we use charitable remainder trusts, because the char -- When I sell my property inside a charitable remainder trust, I do not pay the NIIT.

So let's say the couple comes to see you, very middle-class couple.  Basically, Social Security benefits plus a little bit of interest income.  And they say, "We're going to sell a piece of land we bought when we were 25 years old 50 years ago.  And I don't believe this, but we paid $10,000 for it, and we're selling it for $4,010,000.  That's what the realtors told us to list it at.  We do not have a buyer yet."

They say, "You know, is there any way to save tax on this?"  You might talk to them about dropping that property into a charitable trust.  When it's sold, the gain is going to be sheltered inside the charitable trust -- this is all statutory -- and then when the income comes out, it's going to be taxed at the client's rate.  Now, for a couple like this, they might be in a 0% capital gains rate, or potentially they're going to be in the 15% rate, which is obviously better than paying 23.8, the 20% capital gain rate plus the 3.8% surtax.

For clients that are very philanthropic, non-grantor charitable lead trusts are going to make a lot of sense, because what happens is in a non-grantor charitable lead trust, you are allowed to take a charitable deduction within the trust.  However, that charitable deduction is derived from Section 642(c) of the code, not from Section 170.  But what does that matter?

Why that matters is because it's an above-the-line deduction.  So if my non-grantor charitable lead trust earns $100,000 of income, and I pay $100,000 to charity, I completely wipe out my income, and I do not pay a penny of income tax or a penny of NIIT.

Now, finally, installment sales.  I sell property to my children.  I have a piece of hunting land.  I'm going to sell it for half a million dollars.  I have a basis of $5,000.  I'm going to sell it to my -- to two of my sons, and they'll pay me over time.

Now, if that's the case, if I sold it all at once, some of that gain would be taxed at 23.8%.  However, if I spread that out over time, if I make those payments over time, what is going to transpire is that that installment sale income under 453 is going to come in slowly, and I'm going to be able to fly below the radar.  A lot of this is about managing brackets, okay?  It's about managing brackets, and we have a lot of hard work to do.

We are now in an at least four-dimensional tax system.  Some people would call it five.  You know the dimensions -- the regular tax, the AMT, the 3.8% surtax and this super bonus round of taxes when a married couple's income exceeds 450 or a single person's income exceeds 400.  Now, those are four dimensions.  The fifth dimension might be PEP and Pease.

So what we're really going to be doing on a going-forward basis is doing a lot more bracket management, and that's going to necessitate all of us looking at income over a longer period of time.  The AICPA has made some strides here.  We've developed some software to help you do that.  And you'll learn more about that in the weeks and months to come.

On behalf of the Tax and Financial Planning Divisions of the AICPA, this has been Bob Keebler. Please stay tuned to your weekly electronic AICPA communications for update on this and other relevant topics impacting your clients. Thank you for joining us today.

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