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Deductions & credits
1) You can file a Claim of Right on your 2019 tax return since that is they year that the money was repaid.
Claim of Right for Repayment over $3,000
On TurboTax, you will go to the
- Federal Taxes,
- Deductions and Credits
- Other Deductions and Credits
- Other Deductable Expenses
First question about Generation-Skipping taxes No
Second Question Any Less Common Expenses No
Third Question Second Option put the amount of the Repayment if it was over $3,000
Method 1.
Figure your tax for the year of repayment claiming a deduction for the repaid amount.
Method 2.
Figure your tax for the year of repayment claiming a credit for the repaid amount. Follow these steps.
- Figure your tax for the year of repayment without deducting the repaid amount.
- Refigure your tax from the earlier year without including in income the amount you repaid in the year of repayment.
- Subtract the tax in (2) from the tax shown on your return for the earlier year. This is the credit.
- Subtract the answer in (3) from the tax for the year of repayment figured without the deduction (step 1).
If method 1 results in less tax, deduct the amount repaid. If method 2 results in less tax, claim the credit figured in (3) above on Form 1040 or 1040-SR. (If the year of repayment is 2018, and you're taking the credit, enter the credit on Schedule 3 (Form 1040 or 1040-SR), line 13, and see the instructions for it.)
This is how to make the claim on your return.
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