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I agree.  There appears to be something wrong with TurboTax 2024, like a bug or something.  I think the IRS had a rules change in May 2025 that maybe didn't get updated properly in TT2024.  Another possibility is I made a copy of my "first_try.tax2024" file and then renamed it to "amended.tax2024" and started from there.  Maybe the change in filename caused TT to misidentify the filing status of the original.  Either way, it's doing something that it shouldn't be doing.

This is a common point of confusion because tax software often treats "dispositions" as routine sales, whereas a corporate liquidation triggers a specific set of rules under IRS Section 336.   You’re correct that the gain shouldn’t show up as ordinary business income. In a liquidation, the S Corp is treated as if it sold its assets to you at fair market value. This gain gets reported on the 1120-S, but it should show up on your K-1 as a Schedule D (capital gain) or Form 4797 (ordinary gain or recapture), not as ordinary business income on Line 1.   Here’s how to handle this in TurboTax Business, and why it works this way.   1. The Reporting Correction: 1099-DIV vs. K-1 While a C Corp uses Form 1099-DIV for liquidations, an S Corp generally does not.  The S Corp Side: The "deemed sale" triggers gain/loss at the corporate level. The Flow-Through: That gain passes through to you via the Schedule K-1. The Shareholder Side: You then report the liquidation of your stock on your personal return (Schedule D), using the cash and FMV of property received as your "sales price" and your adjusted basis in the stock as your "cost. 2. How to Enter this in TurboTax Business Since these are assets you've already been depreciating or expensing (Section 179 and De Minimis), you shouldn't just "delete" them. You must record the disposition.   For Section 179 Property (Form 4797): Go to the Federal Taxes tab -> Deductions -> Depreciation. Select the asset and choose "Dispose of Business Property." Enter the date of liquidation as the date sold. Crucial Step: For the "Sales Price," enter the Fair Market Value of the asset on the day of liquidation. TurboTax will automatically calculate the Section 1245 recapture. Because this is Section 179 property, the gain (up to the amount of depreciation taken) will be "recaptured" as ordinary income. Where it goes: This will populate Form 4797, Part III. This is the correct way to show the IRS the original cost, depreciation, and gain. For De Minimis Expensed Property: Since these assets have a $0 tax basis and were never on your depreciation schedule, they won't appear in the "Depreciation" section.   Go to Federal Taxes -> Income -> Dispose of Business Property (or directly to the Form 4797 entry screen). Enter these as a manual sale. Cost: $0 (since you already expensed the full cost). Sales Price: The FMV of the items. This will also result in an ordinary gain on Form 4797. 3. Why it’s hitting your "Income" In an S Corp, Form 4797 gains are part of your total income, but they are "separately stated items." They will show up on Schedule K, Lines 9 or 10. They will not be on Page 1, Line 1 (Gross Receipts). However, they will increase your basis in the S Corp right before you close it out, which usually offsets the "gain" you recognize when you personally receive the property. 4. The "Deemed Sale" Reality Check The IRS requires the S Corp to recognize the gain as if it sold the assets. You cannot avoid this gain appearing on the 1120-S. However, if you are the 100% owner:   The S Corp recognizes the gain (increasing your basis). You receive the property (taxable event). Because your basis increased in step 1, your personal tax hit on the "liquidation" of the stock in step 2 is usually reduced or eliminated.

Thank you, the thing if Turbo Tax "fills out" the worksheets required by Pub 519 using 2025 and 2024 info it creates the backup needed to support the lump sum election in addition to calculating the tax on those SSA benefits.  HR Block software does not include those forms so this is crux of my decision on which to buy.

I suggest you do a web search for your question. "Talk to your accountant" is the default answer for a company that is covering itself. You will see multiple intelligent discussions on the web.    If you distribute stock or real estate etc to beneficiaries, they get the trust basis, which will probably be lower than the market price today. You should pass this information along so that the beneficiaries can prepare their tax returns in future years.   You also have to distribute EVERYTHING in the trust and check the box that says this is its Final Return. You still have time to get an extension, which is probably a good idea since you really have only a couple of weeks to finish up. It's Form 7004, which TTax Business will provide you. (View Forms / Open Form / 7004). Or get it from the IRS website.   Note that an extension of time to file 1041 is not an extension to pay all due taxes by April 15, so estimate that if you have to.   Good luck!

The NYS Inflation Credit (inflation refund check) is potentially taxable on your 2025 federal tax return if you itemized deductions on your 2023 federal tax return.    See the answer provided by DaveF1006 in this thread for details on how to enter the credit amount received in TurboTax to determine if it is taxable on your 2025 federal tax return.    

We have reviewed your diagnostic copy using TurboTax Desktop and found a few missing entries, but Mortgage Interest can be accessed, entered and edited for both Schedule E and under Your Home. We recommend that you download and install TurboTax Desktop. With this version, you should have no problems completing your return, plus you will be able to view all forms in your return before you file. See the instructions here: How do I switch from TurboTax Online to the TurboTax software?

Yes, it answers it.   Thank you very much sending me to the tables for Schedule A line 1b - and I see in that line it says "from tables" although it does not say where the tables are.  Using the table for Washington and income $300K and Family size 2 it works perfectly.   The table Note 1 says to use the "Ratio" method to get to the sales tax percentage that adds the local tax onto the state sales tax of 6.5% and I get the exact same value that TurboTax does.      The IRS instructions online for state plus local sales tax deduction points to an IRS provided calculator.  It would have been much clearer if they referred to the Sched A instruction tables you pointed me to.   Since they use the ratio method to do calculations, I would think it would have made more sense to provide a multiplier number based on family size using the total sales tax rate.   There then would only be 6 numbers for each state and family size.   Much simpler than generating tables for income levels.  I know you at TurboTax don't make the rules, just execute them for us.     Thank you!   BTW - TurboTax needs to add ItsDeductible service again - maybe next year?   

We have seen this report but need help investigating.  Can you please go to the Help or Support menu, select "Send file to agent".  This will upload an anonymous version of your file to the tech support database and give you a token number.  Post the token number here in the replies so that support knows which anonymous tax file goes with this complaint?  Thanks.