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My form 5695 is now--finally--populating correctly and the amount of the credit is now auto-filling into Schedule 3 as it should.   I'm relieved that it's working but I'll never get back the 4-1/2 hours of work it took to get to this point. I guess I know now that this blog is the best place to get answers to difficult questions, NOT the online Chat function nor the phone support. Those were both a waste of time---of the four people I interacted with, none had an appropriate or knowledgeable solution to this issue.    And, of course, this never should have happened in the first place. Even the most basic testing of the software should have illuminated this glitch. H&R Block software didn't have this problem--I'll be giving them my dollars next year!

@jimm-wisc ,  what does line 27  ( passive category ) say ?  line 24 ?  Line 9 through computes the credit  available. The easiest solution may be  -- (a) in the forms mode delete the  form 1116 which should delete the  1116 comp.wks.  Then go back to the 1099-DIV  entries in the  easy-step (or step-by-step) and make sure everything is correct.   Then  go to  Foreign tax credit section and go through the whole thing all over again. OR   (b)  make all the corrections on the 1116 Comp wks. to get the  correct credit.   I am also surprised that  ( and assuming that  your world income is much larger than  foreign source income ) how are you getting  the full FTC amount.  Why is not the  Foreign Source taxable income  to World Taxable income ratio not being applied ? Or for that matter if  your ONLY foreign source  income is 1099-DIV and your FT is US$112, why you have form 1116 and not the safe harbor  path ( i.e. without using form 1116 ). I must be missing something here .   Look forward to hearing from you --yes ?  

Any improvements you made to the home can be added to the Cost Basis, or added as Assets and depreciated along with the house.  However, mortgage interest, insurance, property tax paid during the year before rental can't be added to the Cost Basis.    Closing costs (like title fees, recording fees, appraisals, inspections) and improvements made to get the house ready for rent can be added to the cost basis.  Property Tax paid at closing can be added to the basis.   @nerobins 

You may have a 1098 stuck that needs to be deleted.   Go to Forms mode, or use the Delete a form tool (TurboTax Online) to remove any erroneously started 1098 forms.      How to delete forms in TurboTax Online    How to delete forms in TurboTax Desktop  

@MarilynG1 we’re getting an error when we try to file that tells us there is a known problem with form 5695 and that it will be fixed by… today. It is not and none of us that are web customers can do anything about it.

Accrued Interest Paid is the amount you paid to the seller of the bond due to coupon interest accrued when you buy the bond, which is included in the full coupon that will be paid to you on the next coupon date (and the full coupon is reported on 1099-INT).  Only the net amount of that coupon payment less the accrued paid is income that's taxable to you, so you would make an adjustment to reduce the interest by this amount.  To do this, report the 1099-INT boxes as provided and after the 1099-INT entry screen there are questions for other situations, check the box that you need to adjust the 1099, and then follow the on-screen instructions to enter the accrued paid, which will show as a negative "Accrued Interest" adjustment on Schedule B.     Two caveats: - Turbotax can't assign adjustments to specific income boxes so if your 1099-INT has multiple income types (Box 1, 3, or 😎 then you need to split up the 1099 and input the box you need to adjust separately. - This adjustment should be done in the tax year you receive the first coupon on the bond; If the first coupon doesn't come til 2026 it's up to you to carry it over to apply against 2026 taxes.  I don't think most brokerages track this they just give you a schedule of accrued interest you paid during the year but not all of it may apply.   Accrued Market Discount (AMD) is the income you are getting from buying a bond at a discount which is then redeemed at par (100).  If you hold the bond til maturity/call then the AMD is treated at ordinary income, it's adjusted on Schedule D / Form 8949 to zero out the gain/loss and flips this amount to Schedule B.  If you sell the bond prior to maturity you may end up with a mixture of AMD (mainly) and Gain/Loss depending the timing, but that's a different topic.   As you're finding out, Turbotax does not automatically reflect AMD as a subtraction on state taxes.  There are various ambiguities and interpretations of state tax codes.  I can't speak to NJ taxability or any nuances in NJ state taxes for Treasuries, but the general way to handle this is to make a miscellaneous/manual subtraction on your state return if that is supported.  Note for NY however this type of adjustment apparently precluded e-file.   Another possible way to handle it is to add the AMD into the US Government Obligations amount on a 1099-DIV which should not affect Schedule B and would be treated as a subtraction on state tax just like a MM fund, but you would need to check the outcome of Fed and State returns (and keep records of these adjustment for audit etc) - I've not tried filing with this approach.   There's been a lot of threads on the AMD topic, and you may be able to find more specifics on NJ, for example https://ttlc.intuit.com/community/taxes/discussion/accrued-market-discount-on-treasury-bonds-state-taxability/00/3091472   You may find it useful to build a spreadsheet for your individual bonds to track these different components, and then reconcile that Schedule B and outcome on Fed and State returns is correct as you have to add the AMD and subtract the Accrued Paid etc.   To avoid the AMD issue if you plan to buy more bonds, you can try and buy higher coupon bonds at a premium instead of lower coupons at a discount (premium amortization is tracked by brokerages and reported on 1099-INT).

Thanks @CatinaT1  for the reply. I tried what you suggested with different values. Here are answers and results 1st Question: Should this activity be excluded from the Massachusetts return?  I always answer No here since some of it should be included. 2nd Question: Do you have any Massachusetts differences to report? The relevant form here is MA Schedule E-2 and is basically only Federal info for the Box 1 income and it asks about Interest from MA and non-MA banks. If I answer No all income is included on MA and I am not asked to allocate income. If I answer Yes I am given a table for Mass Differences and Amounts. Not really sure what to enter here. Is it an amount for the MA income? Is it an amount for income after the move? Do I enter two amounts, one for MA and another for non-MA. I went through this a few times with each of the answers.  FYI, these  entries appear MA Differences Smart Worksheet on MA Schedule E. I click continue and answer questions about: Did partnerships renovate a building in an Economic Opportunity Area during 2025? No PTE Excise Credit claimed: 0 MA and non-MA bank interest: both 0 Click Done to complete Partnership (K1) entry Now I am asked Differences between Federal and Massachusetts. I am shown Total as if a full year MA resident which is the sum of all entries I made in the table above. The only way it makes sense to me is to do the two entries. Then for the Massachusetts amount, I need to enter a negative value because positive values increase my MA income even more than the full K1 Box 1 income.  What is also concerning is the help that appears when clicking on the link in the instruction - Differences can arise from items such as bonus depreciation that was taken on assets on your Federal return, but not allowed on your Massachusetts as if you were a full year resident. This does appear to correctly represent allocating the amount based on moved date. The other option I tried was to change the Massachusetts Main Form for Nonresident and Part-Year Resident. This caused the MA Schedule R/NR form to be generated and causes the Income Adjustments questionnaire to appear where I can specific Massachusetts Income While Resident for different types. Also, I entered 0 for all entries for Massachusetts Income While Nonresident. The problem with doing this is the error check ends up removing the MA Schedule R/NR because there isn't any nonresident income which causes all the K1 Box 1 income to be allocated to MA.   Can you give me suggestions on how to correct this?

At the Tax Home a status of "printed" means it has not yet been efiled in that account.   Had you intended to efile it?    If you want to efile it, open your return interview back up.   To do that you can click on a link "Add a State".  That doesn't add one, but will open the interview back up.   Once back in the return, go through the State Review to be sure all is still in order, since there may have been some updates since you were last in that section.   Then go to the FILE section and select to efile the state return.  NOTE:  You cannot efile the state return by itself unless the Federal return was also previously efiled and was accepted.   Be sure you go all the way to the final screen and click on a big orange "Transmit Returns Now" button.