@MonikaK1
I was using the Desktop version, but this issue can be easily replicated on the Online version as well.
The token number is 1099725.
Here are the steps to reproduce:
1. Create a new federal return
2. Enter a test stock sale (1099-B) with $900 profit
3. Enter -900 as the amount and "Section 988 Forex loss" as the description in Federal Taxes -> Wages & Income/Income & Expenses -> All Income -> Less Common Income -> Other Reportable Income
4. Finish your federal return, and start a PA return
For PA return, "Section 988 Forex loss" should be entered as a new transaction in schedule D. This was clearly stated in the link I shared in my original post. The relevant paragraph is as follows:
IRC §§ 987 and 988 Foreign Exchange Gains and LossesGains and losses from foreign currency exchange transactions are reported as Schedule D transactions for Pennsylvania personal income tax purposes.
However, TurboTax does not allow you to enter a new entry in PA schedule D, it would just copy whatever entries from 1040 Schedule D. You are allowed to make PA specific adjustments to each transaction, but you cannot add a totally new transaction that was not present in 1040 Schedule D.
Note that you cannot just adjust the test stock sale to make the profit $0, because the Section 988 Forex loss is a separate transaction that is different from the test stock sale, so both transactions should be reported separately. In addition, according to here, you cannot add Section 988 Forex loss to the 1040 schedule D either, because these losses are treated differently from normal capital losses for federal tax return purposes. Only for PA tax return, section 988 Forex loss is treated the same as other capital losses. So what we want to achieve is to add the section 988 forex loss to PA Schedule D but not to 1040 Schedule D. This is currently unachievable with TurboTax.
