I am a real estate professional who materially participates, so my rental income should not be subject to the Net Investment Income Tax on Form 8960. I use the forms method with TurboTax Premier Desktop. I checked the box saying I am a real estate professional. I properly aggregated my rental properties when I first became subject to the NIIT. On each Schedule E I check the boxes for both active participation and material participation. Although these things should exclude my rental income from the NIIT, TurboTax does *not* deduct my rental income on line 4b of Form 8960.
This seems to be a significant (and very expensive in my case) error in TurboTax. I can overcome this error by manually including my rental income from line 26 of Schedule E on line 4b of the 8960 Worksheet, but I would lose a considerable amount of money if I depended on TurboTax to complete my tax forms correctly instead of noticing the problem and manually correcting for it.
Are other people aware of this error in TurboTax? Are there any plans to fix it?
