TurboTax CD version is not calculating Correct Charitable Donation (deduction)

[fernpete]

In 2023 I had a cash donation carryover amount. In TurboTax 2024 it automatically filled in the carryover amount, I also have $9500.00 of non-cash donations.  TurboTax is not calculating the correct total line 14 on Schedule A.  So the calculate refund was incorrect.  IRS modified my return to lower my refund due to incorrect calculation.

I sent my return today, 4/3/2024, to an agent, the token is:

64360857-97362732

Please review and provide a fix to the bug.  

[AmyC]

When I look at your forms:

Sch A 

• line 17 is a higher number than line 14. 
• Line 14 is limited by the charity limitations.
• Line 13 comes from Worksheet Charity Limit 2.

Worksheet Charity Limit 2 

• your contributions are being limited by your income. 
• Line 7 shows your carryover from last year. 
• Line 44 shows your carry over for next year.

I don't have last year's return to know  if there is a problem between the two. I don't see a problem if the carryover numbers are correct.

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[fernpete]

AmyC,

Thank you for taking time to review my TurboTax issue. 

I’m providing here additional details that should clarify what I see as a code bug in TurboTax 2024 Home and Business edition.

I submit my 2024 tax return in February 2025, Turbo Tax calculated my refund to be $8013.  I receive a letter from the IRS stating that “We have found an error on your 2024 Form 1040-SR, which affects the following area of your return”

• Itemized Deductions

Further, IRS stated that:

“We changed the amount claimed as total gifts to charity on your Schedule A, Itemized Deductions, because it was figured incorrectly or the amount was not limited based on your adjusted gross income.”

Upon further review I found on TurboTax the following example:  If your adjusted gross income is $50,000, and you donated $20,000 in cash, and $15,000 worth of goods. You can deduct only $5,000 of the goods this year ($25,000 limit - $20,000 cash donation = $5,000). Next year, you can deduct the remaining $10,000 (depending, of course, on your AGI). See charitable contribution carryover deduction for more information about charitable carryovers.

I determined that using this example and applying it to my return TurboTax did not limit my deduction correctly, TurboTax applied all of my 2024 cash donations, 2024 non-cash donation and my 2023 carryover deduction with applying the limit to the results on line 14 on Schedule A See calculation:

I am also including the Charitable Contributions from the Tax Return Transcript - Schedule A

I believe that TurboTax has a programing/calculation error that must be acknowledged and fixed.

[BillM223]

I am puzzled. The IRS, in your transcript, seems to have applied the 60% limit on the total of your contributions, which is not the same method described in Pub 526.

Your transcript states "total contributions per computer" equals $51,022. This is exactly 60% of the return's AGI of $85,037. But this is NOT how charitable contributions are limited.

In Pub 526, The calculations for limits is applied first to cash, then to non-cash, then to other categories (which don't apply here), then finally to carryovers.

TurboTax enters $2,435 for current year cash contributions on line 11, then $9,305 for current year non-cash contributions on line 12, then on line 13, it enters $48,587 as the limited cash carryovers. This number is calculated on "Charity Limit 2" which can be found in Forms mode on your return. It is the amount of the carryover which can be used in 2024, allowing for the current year cash contributions.

So, ($2,435 plus $48,587) times 60% equals $51,022. 

THEN, the noncash contributions get to be added from line 12. 

So the total deductible amount as limited, is $60,327, not the $51,022 that the IRS calculated.

Please tell me if you disagree.

[fernpete]

AmyC, with my AGI of 85k and a combined total of 51k cash donations of my carryover of $48K plus my 2024 cash donation of $2435, I exhaust the allowable 60% of AGI and therefore my non-cash donations are not allowed by the IRS.  So, this is what the IRS is saying…. I can't see your explanation as being acceptable to the IRS. 

What am I missing ????? Please keep it simple since I am not a tax expert, just a tax payer.  

As a TurboTax employee/expert, what is TurboTax willing to do for me in terms of representing the TurboTax position on my tax return with the IRS.... especially given the TurboTax 100% Accurate Calculations Guarantee