Route otherprop to rental_income for correct NIIT, suppress auto-QBID#961
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TAXSIM input field 15 (otherprop) represents Schedule E passive property income — rents, royalties, trusts. Per IRC § 1411(c)(1)(A)(i) this belongs in the NIIT base. The prior mapping to miscellaneous_income (PR #931) flowed correctly into AGI but missed NIIT entirely, driving roughly $3.5M of federal mismatch concentrated in the >$1M income bucket. Switch the mapping to rental_income (the PE-US Schedule E concept, which explicitly includes royalties and is already in gov.irs.investment.income.sources). Avoid the QBID over-application that motivated #931 by setting rental_income_would_be_qualified to False whenever otherprop is present in the chunk; § 199A(c)(3)(A) requires the activity to rise to a § 162 trade or business, which TAXSIM input never signals. eCPS n=2000 2025 (non-S-corp): Federal $$ off: $4,218,673 → $432,768 (−89.7%) Federal $15 match: 92.0% → 93.6% Federal 1%-AGI match: 98.6% → 99.9% >$1M bucket $$ off: $3,809,042 → $329,279 Co-Authored-By: Claude Opus 4.7 (1M context) <noreply@anthropic.com>
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PavelMakarchuk
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policyengine-us 1.711.0 includes PR #8564 which unwires the Utah Homeowner/Renter Relief credit from TC-40 refundable credits. Utah Code § 59-2A-205 (homeowner) and § 59-2A-305 (renter) administer the Circuit-Breaker credit on TC-90H and TC-90CB respectively — separate refund applications — and the TC-40 income-tax instructions for tax year 2025 carry no reference to either form. The fix removes a phantom $1,412 refundable credit that PE-US 1.710.6 was applying to qualifying UT seniors and pulls the credit back through the existing state_property_tax_credits aggregate (sptcr / v40). Also add a small regression test pinning the TAXSIM `otherprop` → PE-US `rental_income` routing introduced in PR #961: • IRC § 1411(c)(1)(A)(i) rents/royalties in NIIT base • Form 8960 Line 4a • TAXSIM-35 binary smoke test ($1M otherprop single → fiitax $353,188, NIIT $30,400) The QBID gate override in policyengine_runner.py is asserted by the fiitax target — auto-QBID on rental_income would knock the fiitax by roughly $170K, well outside the $50 tolerance. Co-authored-by: Claude Opus 4.7 (1M context) <noreply@anthropic.com>
This was referenced Jun 4, 2026
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Summary
otherpropmapping frommiscellaneous_incometorental_incomeinvariable_mappings.yaml.rental_income_would_be_qualified = Falseinpolicyengine_runner.pyfor any chunk whereotherpropis non-zero.Why
TAXSIM
otherproprepresents Schedule E passive property income (rents, royalties, trusts). Per IRC § 1411(c)(1)(A)(i) this income belongs in the NIIT base. The prior mapping tomiscellaneous_income(PR #931) put it in AGI correctly but excluded it fromgov.irs.investment.income.sources, so PE never applied the 3.8% NIIT.PE-US
rental_incomeis the natural Schedule E concept — itsgross_income/sources.yamleven comments# Royalties included in rental income. It is already in the NIIT base.PR #931 deliberately avoided
rental_incomebecause PE-US auto-applies the 20% QBID to all rental, while TAXSIM only triggers QBID via the explicitpbusincinput. PE-US'squalified_business_incomeformula gates each source on a<source>_would_be_qualifiedboolean. Settingrental_income_would_be_qualified = Falsefor TAXSIM-routed rental aligns with the TAXSIM convention and is statutorily defensible: § 199A(c)(3)(A) requires a qualified trade or business under § 162, which passive individual rental generally does not satisfy without the § 1.199A-1(b)(14) safe harbor that TAXSIM input cannot signal.Statute / source-code evidence
otherprop=$1M, no other income→fiitax=$353,188,niit=$30,400(= 3.8% × ($1M − $200K threshold)). Confirmsotherpropis in TAXSIM's NIIT base.law87.for:1986:dinc = max(0, d(14)+d(12)+capgn+schede - d(213)).schede=d(73..79)(rent, royalty, partnership, trust, S-corp perestate.for:24-31).parameters/gov/irs/investment/income/sources.yaml:rental_incomeis in the NIIT base.parameters/gov/irs/gross_income/sources.yaml:rental_income # Royalties included in rental income.Smoke test
otherprop=$1M, single age 45, no other income→ PEfiitax=$353,186, niit=$30,400(TAXSIM$353,188 / $30,400). Exact match; no spurious QBID.eCPS n=2000 TY 2025 (non-S-corp, opt1=30,
--disable-salt --assume-w2-wages)By income bucket (federal $15 match rate)
Known follow-up items
Two narrow regressions to investigate post-merge (combined $123K vs $3.79M closed):
taxsimid13544402, 10430302) overshoot — PE now applies NIIT but appears to double-count by ~$260K and ~$0K respectively relative to the baseline offsetotherprop=$0regress by $1,412 each on state tax — chunk-level QBI gate override may be touching themTest plan