How does TurboTax calculate Form 8960 Line 9B?

[BobJ15]

The formula for Line 9b is:  (Total investment income) divided by (total adjusted gross income) multiplied by (state, local and foreign taxes).  Your total investment income is taxable interest (line 2b of 1040) plus ordinary dividends (line 3b of 1040) plus capital gains (line 13 of Schedule 1).  Note that Line 9b is zero if you do not itemize your deductions.

[jrj120]

Is this still the formula in 2022? That doesn't seem to match what Turbotax is doing for this line on my 2022 return.

[jrj120]

It is still the formula. The detail I missed is it is using State and local income taxes paid -- Line 5a on Schedule A. Not state and local taxes actually incurred.

[rancho121761]

Turbo Tax is not putting anything on line 9b in form 8960 even though I have net investment income and I paid state taxes in 2023.  It will not let me manually add to the line either.  Why would this line be blank and not changeable.

[ThomasM125]

If you "right click" on line 9(b) of form 8960 you will see an option for Data Source. When you click on that option, you will see that number comes from Form 8960 Worksheet Part IV Line 2 Column C. If you click on that link, you will be taken to that line entry on the Form 9060 Worksheet. Once there, you may be able to determine where that figure is coming from. You can right click on most of the line entries to trace backwards to see where numbers comes from when they come from other worksheets or schedules. It is hard for me to be more specific without seeing your tax return.

[selfreporter]

Will this amount capped by schedule a line 5e?

If yes, what's the rational behind it as there seems not an explicit instruction from the form 8960 instruction.

[DaveF1006]

Here is how the Net income Tax is Determined on a 8960 Form.

1. First it totals all your investment income and places an amount on Line 12 of the form.
2. Next it takes your Modified adjusted Gross Income for the year and subtracts $200,000 and reports this amount in line 15.
3. Now it compares line 12 with line 15 and will report the smaller amount in line 16.
4. Next it multiplies that amount by 3.8% and that is your net investment tax you will need to.

[Edited 04/04/24|6:25 am PST]

@selfreporter 

[selfreporter]

@DaveF1006 actually I'm asking about Part II line 9b in the form instead of Part III. 

In Part III, the line 12 is an amount after deduction from line 11, which includes line 9b:

[DaveF1006]

Yes, that amount is capped at $10,000.

@selfreporter