FORM 8960 line 9b

[gtwells1]

My accountant has NOT been including local real estate taxes paid on form 8960 line 9b, and only deducting the State Income tax.   Please confirm that Local Real Estate taxes may be included on this line.  

The description on line 9b states "State, local, and foreign income tax" are included on this line.  The accountant is interpreting this statement as "State Income Tax, Local Income Tax, and Foreign Income Tax which is ignoring the Local Real Estate taxes paid.

Can you confirm the correct Interpretation? 

[MayaD]

 Real Estate Tax is a type of local tax. However, for line 9b only income taxes you paid for the tax year that are attributable to net investment income are included.

2024 Instructions for Form 8960

[gtwells1]

Hi MayaD,  Thank you so much for a quick reply.   I am using the Business Edition of TurboTax.  Can you explain why Form 8960 line 9b is including the Real Estate taxes paid in the Calculation?  

[ThomasM125]

You would have to look at the Form 8960 Worksheet to determine how the entry on Form 8960 line 9(b) is calculated. It should be a function of your state and local income taxes , investment income and adjusted gross income:

[gtwells1]

Hi Turbotax,  there is a Bug in your software when calculating  Form 8960 line 9b.  It is including the Real Estate taxes in the calculation, which should be excluded.  The 2 Experts above confirmed that only "State, local, and foreign income tax" should be used.

Form 8960 line 9b is adding income taxes, and real taxes (665+8002 = 8667).

I am using Turbo tax business edition for a complex trust.

Please advise.