I'm working on a client with $55K on Schedule B.  At 3.5% instead of 4.17%, he saves about $400.  Huge loophole, if that's what they intended.  Mutual fund "dividends" include short-term capital gains -- why a tax break for those, and not for long-term?  Although the reduction for gains on post-2011 assets makes up all or most of the difference.  He doesn't want to file an extension, and I'm not sure that would solve the problem anyway.