Adjusted gross income (AGI) is the total income reported on Form 1041, U.S. Income Tax Return for Estates and Trusts, before certain deductions are subtracted. Net investment income (NII) is the income derived from interest, dividends, annuities, royalties, and rents, less allowable deductions. For estates and trusts, the net investment income tax applies to the NII that exceeds a threshold amount, which is 3.8% of the estate or trust's AGI. The instructions for Form 8960 provide detailed information on how to calculate AGI and NII for estates and trusts.