Capital Loss Carryover bug

Forum|Forum|6 years ago
March 28, 2020
1 reply
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I think there is a bug with how Capital Loss Carryover is calculated in TurboTax Deluxe 2019 (Desktop, Windows). It seems like the bug has been introduced in a recent update to TurboTax Deluxe 2019 because a tax return I started on 3/7 does not show the problem, while a tax return I start 3/28 shows the problem.

The problem is when transferring a 2018 tax return where "2018 Form 1040, line 10" would have been a loss if you could enter a negative number on that line.

Here is how to replicate the problem:

start new return
transfer a 2018 return (a .tax2018 file) where "2018 Form 1040, line 10" would have been a loss if you could enter a negative number on that line
go to forms view, and view the "Capital Loss Carryover Worksheet" form
in the "Capital Loss Carryover Worksheet" form, observe "2018 Capital Loss Information Smart Worksheet, D, Taxable Income" is 0 (this is incorrect; it should be the negative number from "2018 Form 1040, line 10" if a negative number could have been entered on that line)
in the "Capital Loss Carryover Worksheet" form, observe "line 1" is 0 (this is incorrect; it should be the negative number from "2018 Form 1040, line 10" if a negative number could have been entered on that line)

macuser_22

Alumni - Champ

I don't see how it can be other then zero when the 2018 1040 line 10 instructions say "subtract line 8 and 9 from line 7. If zero or less, enter 0".

There was a bug that was adding the 2018 line 9 UBT (if any) to line 10 when it transferred that made the carryover income incorrect. That was fixed in the update.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

fourteenAuthor

Level 2

See IRS publication "2019 Instructions for Schedule D", page D-12 where the "Capital Loss Carryover Worksheet" instructions are. Those instructions specify for line 1 ("Capital Loss Carryover Worksheet, line 1"):

Enter the amount from your 2018 Form 1040, line 10, or your 2018 Form 1040-NR, line 41. If the amount
would have been a loss if you could enter a negative number on that line, enclose the amount in
parentheses

Thus, the amount on "Capital Loss Carryover Worksheet, line 1" can/will/should be a negative amount if "2018 Form 1040, line 10" would have been a loss if you could enter a negative number on that line.

And as I mentioned, that is how TurboTax Deluxe 2019 used to behave and automatically filling it in when transferring a 2018 tax return. However, after some recent update the behavior has now changed and I believe the new behavior is incorrect and is a bug.

macuser_22

Alumni - Champ

Unfortunately they no longer provide release notes or bug fix notes.

I would not wait for a fix - just enter the correct data manually. Users that did not have a 2018 TurboTax file would have to manually enter the carry forward data anyway.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**