‘‘(f) APPLICATION TO CERTAIN HIGH INCOME INDI-
VIDUALS.— 
‘‘(1) IN GENERAL.—In the case of any indi-
vidual whose modified adjusted gross income for the 
taxable year exceeds the high income threshold 
amount, subsection (a)(1) shall be applied by sub-
stituting ‘the greater of specified net income or net 
investment income’ for ‘net investment income’ in 
subparagraph (A) thereof. 
‘‘(2) PHASE-IN OF INCREASE.—The increase in 
the tax imposed under subsection (a)(1) by reason of 
the application of paragraph (1) of this subsection 
shall not exceed the amount which bears the same 
ratio to the amount of such increase (determined 
without regard to this paragraph) as— 
‘‘(A) the excess described in paragraph (1), 
bears to 
‘‘(B) $100,000 (1⁄2 such amount in the 
case of a married taxpayer (as defined in sec-
tion 7703) filing a separate return). 
‘‘(3) HIGH INCOME THRESHOLD AMOUNT.—For 
purposes of this subsection, the term ‘high income 
threshold amount’ means— 
‘‘(A) except as provided in subparagraph 
(B) or (C), $400,000, 
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‘‘(B) in the case of a taxpayer making a 
joint return under section 6013 or a surviving 
spouse (as defined in section 2(a)), $500,000, 
and 
‘‘(C) in the case of a married taxpayer (as 
defined in section 7703) filing a separate re-
turn, 1⁄2 of the dollar amount determined under 
subparagraph (B). 
‘‘(4) SPECIFIED NET INCOME.—For purposes of 
this section, the term ‘specified net income’ means 
net investment income determined— 
‘‘(A) without regard to the phrase ‘other 
than such income which is derived in the ordi-
nary course of a trade or business not described 
in paragraph (2),’ in subsection (c)(1)(A)(i), 
‘‘(B) without regard to the phrase ‘de-
scribed 
in 
paragraph 
(2)’ 
in 
subsection 
(c)(1)(A)(ii), 
‘‘(C) without regard to the phrase ‘other 
than property held in a trade or business not 
described in paragraph (2)’ in subsection 
(c)(1)(A)(iii), 
‘‘(D) without regard to paragraphs (2), 
(3), and (4) of subsection (c), and 
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‘‘(E) by treating paragraphs (5) and (6) of 
section 469(c) (determined without regard to 
the phrase ‘To the extent provided in regula-
tions,’ in such paragraph (6)) as applying for 
purposes of subsection (c) of this section.’’. 
(b) APPLICATION TO TRUSTS AND ESTATES.—Sec-
tion 1411(a)(2)(A) of such Code is amended by striking 
‘‘undistributed net investment income’’ and inserting ‘‘the 
greater of undistributed specified net income or undistrib-
uted net investment income’’. 
(c) CLARIFICATIONS WITH RESPECT
TO DETER-
MINATION OF NET INVESTMENT INCOME.— 
(1) CERTAIN EXCEPTIONS.—Section 1411(c)(6) 
of such Code is amended to read as follows: 
‘‘(6) SPECIAL RULES.—Net investment income 
shall not include— 
‘‘(A) any item taken into account in deter-
mining self-employment income for such taxable 
year on which a tax is imposed by section 
1401(b), 
‘‘(B) wages received with respect to em-
ployment on which a tax is imposed under sec-
tion 3101(b) or 3201(a) (including amounts 
taken into account under section 3121(v)(2)), 
and 
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‘‘(C) wages received from the performance 
of services earned outside the United States for 
a foreign employer.’’. 
(2) NET OPERATING LOSSES NOT TAKEN INTO 
ACCOUNT.—Section 1411(c)(1)(B) of such Code is 
amended by inserting ‘‘(other than section 172)’’ 
after ‘‘this subtitle’’. 
(3) INCLUSION
OF
CERTAIN
FOREIGN
IN-
COME.— 
(A) IN GENERAL.—Section 1411(c)(1)(A) 
of such Code is amended by striking ‘‘and’’ at 
the end of clause (ii), by striking ‘‘over’’ at the 
end of clause (iii) and inserting ‘‘and’’, and by 
adding at the end the following new clause: 
‘‘(iv) any amount includible in gross 
income under section 951, 951A, 1293, or 
1296, over’’. 
(B) PROPER
TREATMENT
OF
CERTAIN 
PREVIOUSLY TAXED INCOME.—Section 1411(c) 
of such Code is amended by adding at the end 
the following new paragraph: 
‘‘(7) CERTAIN PREVIOUSLY TAXED INCOME.— 
The Secretary shall issue regulations or other guid-
ance providing for the treatment of— 
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‘‘(A) distributions of amounts previously 
included in gross income for purposes of chap-
ter 1 but not previously subject to tax under 
this section, and 
‘‘(B) distributions described in section 
962(d).’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
(e) TRANSITION RULE.—The regulations or other 
guidance issued by the Secretary under section 1411(c)(7) 
of the Internal Revenue Code of 1986 (as added by this 
section) shall include provisions which provide for the 
proper coordination and application of clauses (i) and (iv) 
of section 1411(c)(1)(A) with respect to— 
(1) taxable years beginning on or before De-
cember 31, 2025, and 
(2) taxable years beginning after such date. 
Æ 
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