Yes the instructions in IRS Revenue Procedure 2009-20 and instructions for Form 4684 explicitly state that Part II needs to be completed AFTER COMPLETING SECTION C.... and in those details it asks for the breakout of assets held <=1year and assets held >1year.... so it is a requirement.....
I don't think it impacts the bottom line with respect to the theft loss deduction but they want the info to be accurate....
Here is my plan (I would greatly appreciate your feedback on this...)
I will save the return with the 4684 form once completed (without any overrides) for a baseline.
I will make the overrides for 4684 Section B Part II and save a new copy of the return.
I will compare all data in the returns and make sure the differences can be accounted for.
I will then test to see if it allows efile with the overrides.
If it does not allow efile I will mail it in....
