The Internal Revenue Service has released draft instructions for Form 8960, the Net Investment Income Tax that was mandated as part of the Affordable Care Act.

The 3.8 percent Net Investment Income Tax applies to certain net investment income above the statutory threshold amounts of individuals, estates and trusts, beginning with their first tax year beginning on or after Jan. 1, 2013. But it does not affect income tax returns for the 2012 taxable year filed in 2013.

The threshold amounts are $250,000 for married filing jointly returns, $125,000 for married filing separately, $200,000 for singles, $200,000 for heads of household with a qualifying person, and $250,000 for a qualifying widow or widower with a dependent child.

The IRS released a draft version of the form in August after much anticipation and has finally released the draft instructions.

They include instructions for U.S. citizens and residents, as well as nonresidents, dual-resident individuals and dual-status individuals. The instructions also describe an election to file jointly with a nonresident spouse.

In terms of estates and trusts, the IRS provides instructions and exceptions for domestic estates and trusts as well as special computational rules for qualified funeral trusts and for bankruptcy estates, along with distributions from foreign estates and trusts.

The instructions also cover numerous other areas, including rules for passive activities, trade or business activities, rental activities, a safe harbor for real estate professionals, recharacterization of passive income, special rules for certain rental income, disclosure requirements for the disposition of a partnership interest or S Corporation stock, and special rules for traders in financial instruments and commodities.