For additional context, my tax situation is very similar to what it was last year. The interests, dividends, W2 are all within less than a percent of last year's. The difference is in investment activity (1099-B was received). In this case, I sold some long held mutual funds for a loss - parts of these mutual funds were acquired prior to 2012 and hence these were categorized as long-term non-covered trades. And these are trades in equities/options (nothing fancy/exotic and no ISOs (incentive stock options), etc). I was expecting my tax bill to be lower because of this (i.e. everything similar to last year except for the tax loss harvesting). Instead, what I am finding out is that I am getting hit with AMT! After going over the forms in Turbo Tax, I am finding out that the biggest culprit is the AMT Schedule D - the AMT schedule is NOT offsetting my short term gains with the long-term non-covered losses that I took (the regular/plain vanilla Schedule D is getting this right by offsetting my short term gains with the long term losses). As a result, there is a difference between the gains in regular schedule D and AMT schedule D and that is triggering my AMT. So what I am looking for is the right way to do this so that Turbo Tax recognizes the long term non-covered losses in AMT Schedule D.
Correct, long term losses are one of the big triggers for AMT. There is no correcting the loss on AMT but there are a lot of worksheets and rules.
I am assuming line 2k is your issue. The 6251 uses the $3,000 cap in figuring the AMT. Please see Form 6251 instructions which includes this portion of an example for line 2k:
For the AMT, you have a $25,000 short-term capital loss from the first sale, and a $40,000 long-term capital loss from the second sale, resulting in a net capital loss of $65,000 for the AMT. However, only $3,000 of the $65,000 net capital loss is allowed for 2022 for the AMT.
Hi AmyC,
Thanks for taking the time to respond. In the instructions you linked to, it was an example of ISO exercise - in my scenario, there is no ISO involved. Here are some more details regarding my taxes:
1. My 6251 has a positive value on line 2k. This came as a surprise to me. So I went looking for how it got there.
a. My Schedule D shows a short term gain on line 7.
b. My Schedule D shows a long-term loss, say,
LT1
on line 8a.LT2
, on line 9. Both line 8a and line 9 agree with the 1099-B I received.N1
.LT1
- again, this agrees with line 8a on the regular Schedule D.LT2
is not being considered in AMT calculations.N2
on line 16 -N2
is much higher thanN1
(from line 16 of regular Schedule D).
What I am not clear on is, why are my long-term losses (for which the broker didn't report cost-basis to IRS) not being considered in "Schedule D AMT"? The instructions on line 9 of "Schedule D AMT" says: "Long-term totals from all Forms 8949 with box E checked" - going by that, I expect Turbo Tax to have filled in line 9 with the value from form 8949. My form 8949 does show
LT2
with box E checked. So why was that not populated on line 9? This is resulting in a larger/additional tax burden on me.
Any insights would be much appreciated!
Thanks,
AJ
I also have the issue that Schedule D AMT is not reporting the amounts from Box E. (Data imported from Schwab.) This appears to be a bug that has not yet been addressed by TT.
Is the proper solution to Override and enter the amounts on Schedule D AMT Part II line 9?
I see no other way to report the correct amounts.
I would appreciate a reply from TT -- it is 7 days to the filing deadline.
Hi @RLKalman - after being on hold for what felt like hours, I was finally able to get hold of a specialist on the phone at Turbo Tax. After describing the situation, which she was able to quickly grasp thankfully, she acknowledged that this was indeed a glitch on TurboTax and that it was going to be fixed for 2023, but not for 2022. So she suggested to mark the Box E transactions as a Box D transaction and enter the accurate cost-basis and file it. This definitely solves the problem, but also increases the audit risk. The specialist was of the view that this is not a significant audit risk and that if an audit does happen that I should contact TurboTax.
So as far as I am concerned, this is a very good resolution for me.
Having said that, each case has different details - so I hope you contact customer support as well (if you haven't already) to get this resolved.
Best,
AJ
Line 15 from my 2022 Schedule D AMT is -7,285 which is very different from my regular 2022 Schedule D Line 15 which is -1,657. It looks like this difference is because Schedule D AMT is not including the value from Long-Term Box E value 5,628. My regular Schedule D has no Capital Loss carryovers, and I've never had to pay AMT. But this big difference in the 2022 Schedule D AMT Line 15 compared to 2022 regular Schedule D is causing a large Capital Loss Carryover for AMT into 2023/2024. Is this caused by a TurboTax system problem that still hasn't been fixed? If this is a mistake, how do I correct it on my taxes? Does this error not matter because I don't pay AMT? Still, if it is an error, it should be corrected so that it doesn't continue getting carried over every year.