@facts wrote:
thanks amy.
so just to confirm, it's treated like a refundable credit. if the credit comes to say $200,000 and current years tax liability is say $10000, i can get refund of $190000? the credit is not limited to current years tax liability. thanks in advance for your help!
Yes, it is a refundable credit. The credit is entered on line 12d of schedule 3, which is the refundable credits. To enter the credit, you must be using turbotax installed on your own computer (Mac or PC) from a CD or download. Switch to forms mode, open schedule 3, enter the amount on line 12d, and write "IRC 1341" on the line next to the amount.
You must calculate the amount of the credit yourself. A large claim of right credit will almost certainly be audited, so save all your documents showing the requirement for a repayment and how you calculated the credit.
