U.S. · Form 8960 line 8
Form 8960 line 8 total investment income.
The Part I lines that add up to line 8, and where each comes from.
Line 8 is total investment income: combine lines 1, 2, 3, 4c, 5d, 6 and 7 of Part I. Line 12, net investment income, is line 8 minus Part II line 11 (deductions and modifications). The instructions tell you which Form 1040 lines supply each Part I figure, such as line 2b for taxable interest and line 3b for ordinary dividends.
Look up a Part I line
Result
Reference table
| Part I line | What it holds | Source on Form 1040 (per the 2025 instructions) |
|---|---|---|
| Line 1 | Taxable interest | Form 1040 or 1040-SR, line 2b. |
| Line 2 | Ordinary dividends | Form 1040 or 1040-SR, line 3b. Section 404(k) ESOP dividends and Alaska Permanent Fund Dividends are negative modifications on line 7. |
| Line 3 | Annuities (gross income, except annuities paid from qualified plans, 403(a), 403(b), IRAs, Roth IRAs and 457(b)) | Form 1099-R. Amounts subject to NIIT are identified with code D in box 7. |
| Line 4a | Income from rental real estate, royalties, partnerships, S corporations, trusts and trades or businesses | Schedule 1 (Form 1040), lines 3, 5 and 6. |
| Line 4b | Adjustment for net income or loss from a non-section 1411 trade or business | Net positive amounts as a negative adjustment, net negative amounts as a positive adjustment. |
| Line 4c | Lines 4a and 4b combined | Computed on the form. |
| Line 5a | Net gain or loss from disposition of property | Form 1040 or 1040-SR, line 7a, and Schedule 1 (Form 1040), line 4. |
| Lines 5b and 5c | Adjustments for excluded gains and losses; adjustment from disposing of a partnership interest or S corporation stock | Net Gains and Losses Worksheet. |
| Line 5d | Lines 5a through 5c combined | Computed on the form. |
| Line 6 | Adjustments for certain CFCs and PFICs | Regulations section 1.1411-10. |
| Line 7 | Other modifications to investment income | For example a section 1411 NOL (negative), deduction recoveries, Schedule 1 line 8z items. |
A note on the form text
The IRS instructions describe each Part I line separately; the combining rule for line 8 is printed on the form itself: “Total investment income. Combine lines 1, 2, 3, 4c, 5d, 6, and 7.” Line 12 then reads “Net investment income. Subtract Part II, line 11, from Part I, line 8.” Both are cited to Form 8960 (2025).
Why gains need care
Gains that are not taken into account in taxable income are not in NII. The instructions give section 121 (sale of a principal residence) and section 1031 (like-kind exchanges) as examples, while gains from selling investment real estate, including a second home that is not a qualified principal residence, can be included. The Net Gains and Losses Worksheet in the instructions sets out the steps. Anything not otherwise reported goes on line 7.
Worked example
Suppose taxable interest is $3,000 (line 1), ordinary dividends are $9,000 (line 2), there are no annuities, line 4c is $12,000 and line 5d is $20,000, with no CFC or PFIC adjustments and no line 7 modifications. Line 8 is $3,000 + $9,000 + $12,000 + $20,000 = $44,000. With $2,000 of Part II deductions, line 12 is $42,000. The amounts are illustrative.
Next steps
With line 12 in hand, compare MAGI to the line 14 threshold and finish with line 17. Part II deductions are mostly itemized deductions properly allocable to investment income, such as investment interest expense on line 9a (Schedule A line 9).
Sources
- Instructions for Form 8960 (2025): Part I lines 1 to 7 and Part II. Read November 2, 2026.
- Form 8960 (2025): The form itself, for exact line wording. 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 line 8 on Form 8960?
Total investment income: the combination of lines 1, 2, 3, 4c, 5d, 6 and 7 from Part I.
How is net investment income figured from line 8?
Line 12 is Part I line 8 minus Part II line 11, the total deductions and modifications.
Where does taxable interest come from?
Line 1 takes Form 1040 or 1040-SR, line 2b. Ordinary dividends on line 2 take line 3b.
Are home sale gains in line 8?
Gain that is not taxable under section 121 (principal residence) or section 1031 is not in NII. Gain on investment real estate, including a second home that is not a qualified principal residence, can be.
What goes on line 7?
Additional modifications not specified on lines 1 to 6, such as a section 1411 net operating loss (as a negative amount), deduction recoveries and certain Schedule 1 line 8z items.
Not tax or legal advice
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