Student loan interest and federally subsidized royalties now count
What the document says“Net investment income shall be determined by taking into account any interest income from a student loan made by the applicable educational institution (or any related organization) as gross investment income.”
The section works out net investment income under rules similar to section 4940(c) of the Internal Revenue Code of 1986, but counts as gross investment income interest from a student loan made by the institution or a related organization, and federally subsidized royalty income. That means royalty income that would otherwise be left out because it came from work by students or faculty, where federal funds went into the research, development or creation of the property. Federal funds include any grant by, and any payment under a contract with, a federal agency to the institution, a related organization, or the student or faculty member.
What the document actually says“Net investment income shall be determined by taking into account any interest income from a student loan made by the applicable educational institution (or any related organization) as gross investment income.”
Interest on a student loan counts as investment income. That holds where the school made the loan. It also holds where a linked body made it.
Some royalty income now counts too. That is where federal money paid for the research. Both used to sit outside the tax.
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