U.S. · Form 8960 line 7
Form 8960 line 7 other modifications to investment income.
The catch-all line for additions and subtractions that lines 1 to 6 do not cover, with the sign each one takes.
Line 7 reports additional modifications to net investment income that are not on lines 1 to 6, such as a section 1411 net operating loss (negative), certain section 62(a)(1) deductions (negative), distributions from estates and trusts, self-charged interest (negative), section 404(k) dividends (negative) and recoveries of earlier deductions. Gains and losses from dispositions not on line 5a also go here.
Look up an item
Result
Items the instructions put on line 7
| Item | How to enter it (2025 instructions) |
|---|---|
| Section 1411 net operating loss | Enter as a negative amount. Only the part of an NOL attributable to net investment income applies, and no NOL from a year beginning before 2013 can reduce it. |
| Section 62(a)(1) deductions | Deductions allocable to a passive activity or trading business that are not taken into account on line 4a or 5a go here as a negative amount. |
| Estate and trust distributions | Enter the amount from Schedule K-1 (Form 1041) box 14, code H. A positive amount also increases MAGI on line 13 by the same amount. |
| Section 404(k) dividends | Dividends reported on line 2 that are section 404(k) dividends are entered as a negative amount. |
| Self-charged interest | Interest on line 1 received from certain nonpassive activities is entered as a negative amount. |
| Deduction recoveries | Recoveries of deductions taken on a prior year Form 8960; the instructions include a Deduction Recoveries Worksheet. |
| Form 8814 election | Parents electing to report a child dividends and capital gain distributions enter Form 8814 line 12 here, excluding Alaska Permanent Fund Dividends. |
| Schedule 1 line 8z items | Other items of net investment income or properly allocable deductions, such as substitute interest and dividend payments and net positive periodic payments on certain notional principal contracts. |
| Dispositions not on line 5a | Gain or loss from an annuity or life insurance contract disposition, and casualty and theft losses on Schedule A line 15 (negative). |
How to use this line
Check lines 1 to 6 first; line 7 is for what they do not cover. Enter deductions and losses as negative numbers so that line 8, which combines lines 1, 2, 3, 4c, 5d, 6 and 7, comes out right. Gains and losses attributable to assets in a non-section 1411 trade or business are not part of net investment income. Early withdrawal penalty on Schedule 1 line 18 goes on line 10, not line 7, and so does the expense of a trading business that is not reflected on line 4a.
Worked example
A filer has $40,000 of interest and dividends on lines 1 and 2, and a $5,000 casualty loss on Schedule A line 15. Line 7 is -$5,000, so, with no other items, line 8 is $35,000. A beneficiary with a positive $2,000 on Schedule K-1 (Form 1041) box 14 code H enters $2,000 on line 7 and adds $2,000 to MAGI on line 13. Amounts are illustrative.
What this page does not do
It does not decide whether an item is net investment income. See the line-by-line instructions and the NIIT calculator for the tax computation.
Sources
- Instructions for Form 8960 (2025): Line 7 list of modifications, signs and the notes on Form 8814, K-1 box 14 code H and the section 1411 NOL. Read November 2, 2026.
- Form 8960 (2025): The exact wording of lines 7, 8 and 10. Read November 2, 2026.
These are the tax year 2025 edition instructions and forms (published for returns filed in 2026). The IRS revises them each year, so thresholds, line numbers and limits can change; check the current edition before relying on a figure.
Frequently asked questions
What is Form 8960 line 7?
Other modifications to investment income: additions and subtractions to net investment income that are not otherwise specified on lines 1 to 6.
Do losses go on line 7 as negative numbers?
Yes for the items the instructions mark, such as a section 1411 NOL, certain section 62(a)(1) deductions, section 404(k) dividends and self-charged interest, which are entered as negative amounts.
Where do distributions from an estate or trust go?
On line 7, using the amount from Schedule K-1 (Form 1041) box 14, code H.
Does a positive box 14 code H amount change MAGI?
Yes. If it is positive, enter it on line 7 and increase MAGI on line 13 by the same amount.
Where does the early withdrawal penalty go?
On line 10, not line 7, according to the instructions.
Not tax or legal advice
This page summarizes IRS instructions and is not tax, legal or financial advice. A CPA, enrolled agent or the IRS can confirm what applies to your situation. Everything runs in your browser; nothing you enter is sent anywhere.