Which type of income is NOT included in net investment income when calculating the net investment income tax?

When calculating net investment income for purposes of the net investment income tax, nonemployee compensation is not considered part of that income. Net investment income primarily includes interest, dividends, capital gains, and certain rental and royalty incomes, all of which are generated from investments rather than from active work or services rendered. Nonemployee compensation refers to income earned outside of an employer-employee relationship, such as freelance payments or contracts, which is fundamentally different in nature from investment income.

Understanding this distinction is crucial for tax calculations, as it clarifies which sources of income are subject to the additional tax imposed on net investment income. Investable assets generate a different set of income streams that are specific to capital gains and earned interests, whereas nonemployee compensation reflects earned income that is subject to different tax treatments.