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?

[3peronmi5]

I purchased your 2018 TurboTax (TT) Premier edition. So far it has been working well except for one remaining item that has me stumped.

My wife’s Mother passed away in Sep 2017 and her estate (Survivor’s Trust) was settled in 2018. I ha...The Trust’s final 1041 tax return was separately filed by her CPA on 6/21/18. The numbers I entered from my wife’s paper K-1 into TT’s “Trust Fiscal Yr” form (Part III) solely included my wife’s share of the Trust for Box 11A (Excess Deductions on Termination) and Box 11C (Long Term Capital Loss Carryover).

Although TT properly transferred the Box 11C amount to Schedule D, the Box 11A amount never made it .... See these instructions at this link: https://www.irs.gov/instructions/i1041sk1

Please advise what I am doing wrong and instructions on how to account for this significant “Other Itemized Deduction” that is not subject to the prior tax year’s (2017) 2% floor.

Thanks in advance

[tagteam · Accepted solution]

" how to account for this significant “Other Itemized Deduction” ...."

TurboTax has removed the ability to enter such deductions in the Step-by-Step (interview) mode. 

Rather, you will need to force an entry in Forms Mode directly on Schedule A (see screenshot). 

[3peronmi5]

I'm using the Premier version of TT. Schedule A is not showing under "Forms in My Return" but I can pull it up by using "Open Form" icon if upper left. TT is not letting me enter any information into Line 16. Any suggestions of what to do? Thanks

[3peronmi5]

Reading past FAQ, the reason Schedule A is not listed in "Forms in My Return" is because the standard deduction is higher than itemized deductions (before entering line 16). Maybe I'll fake a deduction just to allow it show then enter Line 16 then remove the fake deduction?

[3peronmi5]

That didn't work either :(

[tagteam]

First of all, as you have probably discovered, you will need to do an override to enter a figure on Line 16 (right-click in the box and select "override" from the dropdown - see screenshot in answer). Doing so will prevent you from e-filing, you will have to print and mail your return.

More importantly, if the total of your itemized deductions, which would include the amount you enter on Line 16, do not exceed your standard deduction, then you really don't have to bother entering the amount from Box 11A on your K-1 since it will not have any impact on your return.

[3peronmi5]

For all the many obscure tax events TurboTax asked about, one would expect them to address this somewhat tax situation where Excess Deductions from a parent's final Trust return can be easily accounted for in accordance with IRS Instructions. This important omission will now require me to hire a CPA at a significant. So very disappointing :-(.  

[3peronmi5]

Forgot to thank you for your instructions. The over ride worked perfectly as you described 🙂

[clemaster]

I have the same issue, there is a disconnect with turbotax not providing for this a per the IRS guidelines. Very dissappointed and had I not really been looking everything over I wouldn't have caught that this deduction was overlooked.

[geobrick]

If it's any consolation, TaxAct is also not handling the excess deduction properly. I turned to TurboTax to see if they'd get it right. The IRS instruction on how to handle this in 2018 didn't get published until February 5, 2019 so it may have been too late to make it into the program. I really don't want to have to file by mail because of this but it seems it's looking like I'll have to. For reference, the IRS instruction is here: <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> . On page 2, under Box 11, Code A it says, "If this is the final return of the estate or trust, and there are excess deductions on termination, you may deduct the beneficiary’s share of the excess deductions on line 16 of Schedule A (Form 1040)." Seems pretty clear.

[sgove6]

@tagteam thank you for the screenshots and steps to override line 16 of Schedule A... I only wish this could be accomplished without losing the ability to efile. Intuit, can't you fix this?!?
@Geobrick thank you as well for all your comments and feedback on this matter, and for the alert that TaxAct is having similar problems with this... you saved me from heading down that path myself!

[geobrick]

@sgove6 and others in our situation - I just found a tax software with the initials TS that's getting it right. So if you haven't paid for your tax software yet, you can switch over. It's free to try so I just ran my numbers through it. Just note, you have to be itemizing for the excess deduction to make a difference. Once you cross the line for itemized deductions, you can play with the box 11A number on the K-1 and see it has an effect as the displayed tax amount changes based on the number you enter into box 11A.

[3peronmi5]

Thanks for all your comments! I ended up having to go to a CPA and pay $400 to make sure my 2018 return was correctly done. The CPA's software had no issues including these allowable "excess deductions". TurboTax prevented me from filing electronically due to the suggested override. I bought TT specifically so I could e-file myself (didn't happen). These peer Forums are great for exchanging information, questions and ideas, but how does one actually contact Intuit to request a refund since their software failed many of us? They guarantee a "100% accurate return". Well, NOT in this case. Thanks and best wishes to all of your great contributions 🙂

[sgove6]

@Geobrick Awesome news, I will check it out. Thanks for the tip!
@3peronmi5 Interesting point regarding the "100% accurate return" guarantee... you might have to go the mail route to request a refund

[geobrick]

@3peronmi5, I'd put most of the blame on the IRS for this situation (The new tax law plus the unplanned gov shutdown likely made it harder to get all the rules and instructions out in time). The pro's probably have a more direct line to support with the software they use and when they bring up an issue, they've got more credibility then someone like me. I'm sure TurboTax get a lot of false problems reported. This one is the needle in the haystack.