Form 1116 Gross Income from All Sources is Wrong - Too Low

[DavidRaz]

The Form 1116 Gross Income from All Sources is Wrong. It's too low by nearly half. It appears not to be including any of the "Other Income" on Schedule 1 (I understand all the lines it's supposed to be adding). In my case there is a sizable DCP number in Schedule 1 line 8t which it is not including (that alone is bigger than the number it provides). Unfortunately the line for Gross Income in Form 1116 is not editable so I can't fix it manually. How can I fix this bug in the software. I can provide the token number for my tax return access to a TurboTax agent if they want to confirm this error so it can be fixed, and in the meantime provide a work around so I can complete this.

[pk]

@DavidRaz , sorry but the meagre information that you have provided makes it impossible to help and we cannot see your screen.  For us we depend on your description of the issue ( even if with dummy but reasonable numbers ).  I am assuming what you are talking about is that you have large foreign pension and this is not being included in the "gross foreign source income" for purposes of form 1116.

(a) You pension is from which country  and of what type ---- Tax Treaty between US and that country may affect  tax treatment ?

(b) Where is your Tax Home --- US or in a foreign country ( Some treaties  and  taxation of pensions are controlled by tax treaty )

(c) Are you using desktop version or the on-line --- this is  in regards to working in the forms mode ?

Will circle back once I hear from you --yes ?

[DavidRaz]

Thanks for your help! Sorry for the meagre information. I was trying not to overshare exact numbers. Below are the exact numbers but all muliplied or divided by the same constant number. So all proportion are correct.

1. I live in the US and am a US tax resident
2. I'm using the desktop TurboTax premier on Mac (tagged the post with this)
3. I have some income from a business investment in another country but it's not a large portion of my total earnings. But hence the Form 1116
4. My DCP (Deferred Comp Plan) is not a foreign pension. It is from a former US employer. Managed with Fidelity. And it provides a W2 and taxes are withdrawn from it. It is regular US income. I enter it in TurboTax in the W2 questionnaire, and TurboTax enters that on Schedule 1, line 8t.
5. Here are relevant numbers (constant ratio applied) as enter by me through questoinnaire and shown in TurboTax forms as follows
   1. Schedule 1 line 3 and 4 are blank (i.e. there is no business loss to deduct or bring down my Gross Income)
   2. Schedule 1 line 5 (business income from my foreign business): $15k
   3. Schedule 1 line 8t (DCP income reported on W2): $103k
   4. Schedule 1 line 9 (total other income): $103k
   5. Schedule 1 line 10 (total "additional income"): $118k
   6. 1040 line 3b (dividends): $55k
   7. 1040 line 8 (additional income from Schedule 1 noted above): $118k
   8. 1040 line 9 (total income) $173k
   9. There is no Schedule C - and hence no "cost of goods sold" to deduct, so nothing to bring down this number
6. Here is the relevant line from Form 1116
   1. Form 1116 line 3e (Gross Income from all sources): $70k
   2. It shows in the "worksheet" (the mere two lines above it) line A "Calculated Gross Income from all sources": $70k, and line B ("Adjustment amount...") is blank
   3. Note that line 3e (or worksheet line A) are not editable and are calculated by TurboTax so I can't manually fix it.

So, my "Gross Income from All Sources" appears to actually be $173k (or more given some of the potential adjustments for "Gross Income from all..." although I don't have any particularly interesting adjustment additions for it, and I have none of the few possible subtractions as noted above).  And for some reason the TurboTax calculation for "Gross Income from all" is excluding the Schedule 1 line 8 "Other Income" from my DCP, which the IRS says should be included, and results in a significantly lower $70k number. And other posts in this forum which list what should be included say all "positive income amounts on the Other Income statement" should be included. IRS guidance also indicates this. Just as taxable IRAs etc. are included.

Any suggestions on this bug, how I could work around it, and how Intuit can proceed with an update fix? 

[pk]

@DavidRaz  thank you for the details with the dummy figures.  

While I am not familiar with the Apple/ MAC  product, but looking at the numbers something is not right. To be exact, 

 1.   Income from ALL sources should be the same as  form 1040 line 9  i.e. before adjustments -- that is the gross income from all sources for the tax year.   So I don't understand the figure of $70,000 , unless it is ignoring the deferred Comp ( NQDC) amount of $103,000 from your world income for the tax year.

 Since I don't know the product , I cannot show a way around.  I know for the windows version ( of Home &  Business that I use ), I can go to the forms mode and modify the form 1116 worksheet -- this is editable.

I will let some body familiar with MAC product answer