How do I elect to include qualified dividends in investment income on line 4g in form 4952? TurboTax online is not giving me the option to elect. Thanks!

[dog-lover]

The IRS instructions (https://www.irs.gov/pub/irs-pdf/f4952.pdf) clearly state that I can make the choice. I am unable to get to the choice screen with TurboTax online. Please help me navigate to it.

[MarilynG1]

You are correct that you have a choice to include qualified dividends in calculating the Investment Interest Expense deduction.  However, TurboTax automatically makes the choice to include qualified dividends or not, depending on which is most beneficial to your return.  

Form 4952 calculates the investment interest expense deduction and transfers the deductible amount to Schedule A, line 9. Form 4952 will not print with the return, unless Schedule A is fileable.

Even when Schedule A is fileable and there is an investment interest expense deduction shown on Form 4952, the IRS does not require that you include Form 4952 with your tax return under certain conditions. See IRS instructions for Form 4952: "Who Must File". In this case, the program will also not print Form 4952. 

Those conditions are when all of the following are true:

- investment income from interest and ordinary dividends minus qualified dividends is more than your investment interest expense
- there is no amount on line 5
- there is no amount on line 2, and
- the amount on line 3 is not more than the amount on line 6

@apoorva-agarwal 

[dog-lover]

@MarilynG1 Thank you very much for your response. Do you know whether using the TurboTax desktop version instead of online will provide me the flexibility to elect to add qualified dividends in line 4g of form 4952? I don't want TurboTax online to make the decision for me without giving me the option. In my case, I have done the math and I have a better outcome when I make that choice.

[Mike9241 · Accepted solution]

change to forms mode

click on 4952 (not 4952 wks)

you should see line 4g that is open for entering an amount

after entering you should see a change in line 6

[MarilynG1]

Here's How to Transfer from TurboTax Online to TurboTax Desktop.

@dog-lover