Net investment income (NII) is the amount of income an individual or business earns from investments, minus any expenses incurred in generating that income. It is a key component of taxable income and is used to calculate taxes owed. NII can include income from various sources, such as interest, dividends, capital gains, and rental income. Expenses that can be deducted from NII include investment management fees, interest on investment loans, and depreciation on investment properties.
NII is important because it can impact an individual’s or business’s tax liability. It can also be used to assess the performance of an investment portfolio and to make investment decisions. Historically, NII has been a significant source of revenue for governments, and it is likely to remain so in the future.