On November 26, 2013, the Department of the Treasury issued final regulations for the Unearned Income Medicare Contribution,1 the 3.8 percent tax,2 which was enacted as part of the Patient Protection and Affordable Care Act.3 Although the statute provided a framework for imposition of the 3.8 percent tax on the disposition of interests in passthrough entities (such as S corporations, general partnerships, limited partnerships, limited liability companies and limited liability partnerships) the rules were not abundantly clear even after the regulations were issued. In this article, we endeavor to provide some insight into how the 3.8 percent tax is imposed and some of the traps apparently involved.