Hi Bill,
Thank you for your response. The suggestion from the MA DOR is interesting. Mass.gov states that Massachusetts has adopted the Federal provisions for HFD's. So the suggestion to enter the HFD on line 8 of Schedule Y seems to conflict with Federal tax rules which do not allow a deduction for an HFD. Also, Schedule X, line 2, asks for taxable IRA distributions. It seems that amount should agree to the taxable IRA distributions shown on Federal Form 1040, line 4b.
As you point out, both approaches have the same end result. I'm going to stay with my approach which is to follow the Federal tax provisions for HFD's as I feel confident I can support that based on the disclosures on the mass.gov website.
