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Is line 8 on Schedule B checked "No" also? If it is not checked, go back and do a Federal Review. It should ask you a question about Foreign Trusts - just answer that "Yes" or "No" as appropriate and that should take care of the error you are seeing.
It is checked "no." When I asked the automated system about it, it replied that it is a known issue that TurboTax is trying to fix. It would be nice if they sent out am email letting people know it was fixed, but I will go on and see if it was.
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