I noticed Turbotax Form 8801 does not calculate part III, even if I filled in my 2021 Qualified Dividends and Capital Gain Tax Worksheet line 4 and line 5.

[hahashenme]

I noticed Turbotax Form 8801 does not calculate part III, even if I filled in my 2021 Qualified Dividends and Capital Gain Tax Worksheet line 4 and line 5. Thus, line 11 in form 8801 is much higher than it should be so line 15 is higher than it should be.

[hahashenme]

I verified that by downloading my online TurboTax tax file and importing it into a desktop version. I saw that even if I filled out the 2021 Qualified dividends and capital gain smart worksheet, TurboTax did not calculate part III on 8801.

[DaveF1006]

It depends. Is there an amount listed on Box 11 on the 8801? IRS specifically mentions Complete Part III only if you are required to do so by line 11 or by the Foreign Earned Income Tax Worksheet. See the instructions under Part 111 in your 8801.

@hahashenme 

[daily_impressions]

I noticed the same last night as I was to figure out why TT (downloaded app) wasn’t allowed me to claim more of my AMT credit from last year.

Line 11 on form 8801 described several scenarios where Part III should be used including “you had a gain on both lines 15 and 16 of Schedule D” (for 2021).  Which I have

[JohnW152]

You're correct that, if you had a gain on both lines 15 and 16 of Schedule D (Form 1040), you would generally enter the amount from line 3 of the worksheet in Part III.  See Foreign Earned Income Tax Worksheet -- Line 11 in the Instructions for Form 8801. 

But something else to consider is whether line 10 of Form 8801 -- which reads Subtract line 9 from line 4. If zero or less, enter -0- here and on line 15 and go to Part II. Form 1040-NR filers, see instructions -- has an entry. 

If line 10 is zero, you wouldn't complete the Foreign Earned Income Tax Worksheet -- Line 11, and the scenario in which having a gain on both lines 15 and 16 of Schedule D wouldn't come into play.

@daily_impressions 

[daily_impressions]

@hahashenme 

I found a similar post on Reddit.  Here is a workaround to the bug in TurboTax that I verified worked for me:

I found a fix!

Enter zero on foreign earned income tax smart worksheet line 2a in form 8801. That will make part III come alive and properly calculate based on qdcg tax smart worksheet inputs."

https://www.reddit.com/r/tax/comments/y5oejo/comment/jd88n1p/?utm_source=share&utm_medium=web2x&cont...

A simple workaround like this is proof that it is a bug in TurboTax.

[daily_impressions]

@JohnW152 

Line 10 does have a non zero amount.  The workaround I posted - putting zero on line 2a of the Foreign Income Tax Smart Worksheet - did the trick to calculate line 11 using Part III.   Clearly a bug in TurboTax.

[flyingeverywhere]

Found the same problem. In my original 2021 return filed last year, there was  credit for prior year AMT. When I tried to amend the return for some other reason, the prior year AMT credit was gone. And it is because 8801 part III is not filled anymore, which should be filled according to line 11 instruction.

[flyingeverywhere]

Great! This works.