@LenaH
It's starting to make sense.
So if you own a mutual fund which derives 100% of it's income from US Treasury Obligations, the expenses related to that NC tax exempt income would have already been removed by the mutual fund (by the expense ratio), so there would be no need to add the expenses back in as "additions". I just can't see how this would work in real life but thank you for the example!
I actually called NC DOR for clarification of NC Form 400 Schedule S line 12 instructions and was told they hardly ever see it used and were confused by the wording themselves.
