Maryland 504

[MBSC]

The Maryland 504 form is automatically calculating taxable income after federal adjustments, at far higher than actual taxable income.  It must have something to do with a large federal deduction for 2019 Maryland tax paid that is disregarded at the state level but the math still doesn't work.  Thoughts?  My extension is already on file!  Thank you.

[BillM223]

So you are talking about a trust or estate return in Maryland?

What are the value in the specific lines that you are concerned about?

Remember that we in the Community cannot see your private tax data, so help us help you.

[MBSC]

Federal - Form 1041 for a trust.  2020 income comprised of interest, dividends and OID discount totaling approx. $21k.  In 2020, paid 2019 MD state tax liability of $88k (we sold off most of the investment portfolio and paid capital gains) so had negative federal income for 2020 and will get a full refund of our $17k estimated federal payments (will apply to next year etc.).

MD state - Form 504 for a trust.  This is the problem.  The MD 504 shows in LIne 1 the -$67k of correct federal income.  Line 4 shows the same plus a $100 exemption.  Line 5 takes the two negative figures and sums them to a positive $135k of income, and line 6 adds the $135k and - $67k and incorrectly creates $69k of positive income, with tax liability of $3200 flowing from that.  Line 5 and 6 have to be wrong....  The 2020 income was still really only $21k from the investment income. 

Thanks very much for your help.  I filed an extension for both federal and MD last week based on the assumption I paid all 2020 taxes and was in a refund status for both.

[MBSC]

And I'm not certain how the $10,000 state and local tax limit works on our federal return if TT tells us we're entitled to a refund of our entire $17k estimated payment.  Thank you.