I did a test of the situation you are describing and TurboTax did offset the capital losses against the capital gain distributions. I don't know why it's not working for you.
On your Schedule NJ-DOP, what are the exact amounts on line 1, in column f? What are the exact amounts on lines 2, 3, and 4?
If you are using the desktop TurboTax software:
- Make sure your software is up-to-date. There was an update to the federal software yesterday. The most recent update to the New Jersey software was on March 20.
- If you are looking at Schedule NJ-DOP in forms mode, make sure you are looking at line 1 of the actual form, not the Smart Worksheet at the top.
- Make sure you do not have any overrides in your federal or state tax return. If an amount is overridden the numbers will be red in forms mode.
