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12-23-2017 03:09 PM - edited 12-23-2017 03:27 PM
I just noticed an important error in Form 8960 and the calculation of the 3.8% Net Investment Income Tax. I have business income from an S Corporation that I am actively involved in, which is reported on a Schedule K-1. Because this is active income (HRB asks about this while filling out the K1 information), this should not be be considered for the purposes of Form 8960, but HRB Premium 2016 enters this income into Line 4a of Form 8960 (Rental real estate, royalties, partnerships, S corps, trusts, etc). The instructions for Form 8960 clearly state that only passive activity is considered for calculating this tax.
Could you please confirm that this bug something that has been fixed for HRB 2017? Thanks!
Solved! Go to Solution.
12-29-2017 02:45 PM
This is not an error. The program will enter it on 4a, but there is a place to adjust the amount. Click the Taxes tab, then choose Go To on the Net Investment Income Tax Line. Click Next a couple times to get to the page "Adjustments to Net Investment Income. On the line "Income from rental real estate, royalties, partnerships, subchapter S corporations, trusts and estates" enter as a negative, the amount that should not be included in NII. If line 4a is a loss, enter the adjustment as a positive amount. The amount on line 4a appears next to this adjustment box.
This will carry to line 4b, which will net against 4a, with the result appearing on line 4c.
The 2017 version works the same way as 2016.