The net investment income tax applies to estates and trusts when their adjusted gross incomes for the year exceed the dollar amount at which the highest tax bracket begins. The net investment income tax is due on the lesser of your net investment income or the portion of your MAGI that exceeds the thresholds. For net investment income tax purposes, the same is true, and capital losses can reduce the amount of NIIT you pay. Personal Finance. For individuals, it applies to U. That’s usually more difficult, but steps like delaying taking withdrawals from traditional IRA or k accounts or deferring income you expect late in the year until early next year could keep your income down, thereby helping you avoid the tax. Continue Reading.