TT 2018 Premier not properly transferring K-1 Excess Deductions to Schedule A Line 16 as instructed by the IRS. What am I doing wrong?

[geobrick]

@sgove6, what's your plan for this? For me, I'm leaning towards giving up on a fix and filing with TS. It will cost me more because I already paid for TA but I already filed four of the five allowable returns and paying more to a company that got it right appeals to me. The benefit will be, no requirement to paper file and no flag to the IRS that something is wrong (which would be the case if I filled in box 10 on the K-1 with the box 11A amount to force the correct tax outcome). The results of my run through using TS compares dollar for dollar with my TA return (with the K-1 box 10/11A swap) so I'm confident it's working. Also, I don't know if I mentioned it but initially, I didn't know TS and TS Pro were two different programs and tried the TS Pro demo. It also handled this situation in the way we consider correct. This adds to my confidence in our interpretation of how this situation should be handled. Add to that @3peronmi5's CPA results and I think we're right. Of course there's a bias in how I'm only trusting the sources that agree with me.

[sgove6]

@Geobrick, I'm inclined to do the same. In fact, I'm at the TS website now... I just updated my TT install to see if, by any chance, Intuit may have finally updated their software to account for this use case. Regardless, thank you once again for the heads up!

[sgove6]

@Geobrick, so I checked out TS... and I think I'm going to stick with Intuit and TT. True, they do handle the K-1 box 11A entry as we have interpreted the rules here, but I hate how they deal with stock transactions and 1099-B's. For my federal return, I'll probably end up using the override option in TT and mailing in my return...

Also, there are my state's instructions to consider. California does not conform with the federal tax law changes that suspended miscellaneous itemized deductions. Conformity between CA and federal only goes to 2015, which means TT is handling the state calculations on this correctly. Assuming I have interpreted all of this correctly, of course...

[geobrick]

@sgove6, I agree completely with your assessment of the way TS handles the 1099-B's. I entered it as one transaction for my initial test but when I knew it was handling the K-1, 11A transactions properly and there were no changes to TaxAct, I just slowly entered all my 1099-B transactions over several days. I've been ready to click "efile" but just got an email from TaxAct asking me to give them access to my return so they can study it further. At this point I don't think a fix is coming in time. The best I can get from them is an acknowledgement of the problem and a suggested work-around that will force me to paper file the return. In the past, they've been good at acknowledging problems.

[sgove6]

@Geobrick, I would be very interested to hear what TA says about this... I have used their online product in the past and was very happy with the results. I've decided not to move forward with TS, for what it's worth... at this point, the deduction is worth pursuing but not enough to go the route of @3peronmi5 (i.e. using a CPA to file).

Another option for me is to efile (i.e. no overrides) federal and state as is with TT, then follow up with an amended federal return at some point in the future. It's not as straightforward, but it would allow me to avoid an override of the federal, then "backing out" the override on my state return.

[geobrick]

@sgove6 , TaxAct got back to me with a really thorough, well thought out response but in the end they don't agree with us. They say the IRS instruction I referenced conflicts with other IRS publications and had links to those conflicting statements. Even though their references predate the i1041sk1.pdf instruction, I understand their position. It's very similar to what @tagteam has been saying all along. I'm sticking with my interpretation and will efile with TS today. I'm sure nothing will happen and the IRS will eventually clarify all this in the future (either in our favor or not).

[3peronmi5]

Not sure why all the hubbub here. Since I first started this thread, I’ve learned a lot both from you folks and outside CPAs.  My CPA and my Sister in Law’s CPA (located 2500 miles away) both recently (and independently) filed our returns that included the excess deductions and my refund is in the bank. Amazing that third party software folks don’t understand the tax laws but I can still read the 2018 IRS instructions for the 1041 K-1 at <a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/i1041sk1.pdf">https://www.irs.gov/pub/irs-pdf/i1041sk1.pdf</a> and it’s crystal clear. On page 2 on bottom right under Line 11a, it succinctly states this is an allowable deduction but only in the final year of the Trust (our case). I’ve also found some other website articles that support this same conclusion  What’s even more puzzling is why the TT folks haven’t yet interceded into this thread especially when I’m logging in through their URL. Since TT didn’t provide me with a 100% accurate return, I’ve got to now research how to get my money back or at least get a free copy of TT for tax year 2019. Best of luck to all you smart folks (seriously)

[geobrick]

@3peronmi5 Thanks for verifying with two independent CPAs. I'm sure companies like Intuit and to some degree taxact could easily get someone with authority at the IRS to rule on the conflicting documents. I've got to credit the company with the initials TS for getting it right (in our opinion). I filed about an hour ago but only after I paid for the software was I able to see the actual Schedule A the software produced. Before that, I was only able to see the total Itemized deductions change based on adding or removing the box 11A amount. I was a little surprised when I looked at line 16 and saw they used the description "ESTATE TAX DEDUCTION FORM K-1". That was going to be my work-around in TaxAct. I was going to put my 11A amount in Box 10 to force the correct tax result. Oh well, seems that was their quick fix for  handling box 11A as well (but without user intervention).  

[tagteam]

Screenshot for override on Schedule A.

[geobrick]

@tagteam, I know the request is old, but were you asking me to post a screenshot of the override TaxSlayer did for the Schedule A on my 2018 return?

[macuser_22]

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@geobrick wrote:

@tagteam, I know the request is old, but were you asking me to post a screenshot of the override TaxSlayer did for the Schedule A on my 2018 return?

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No.  tagteam posted a screenshot for you to see.  This thread is an old thread form the old AXE (Answer Exchange) that no longer exists and was migrated to this new "Community" forum in June (hence the June date of migration, not the real date of post).   Unfortunately links and screenshots did not migrate with the posts so they are blank.