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@misskeiko wrote:

Hello,

In CA, is out-of-state tax-exempt interest dividend added back to taxable interest? Yes In Lacerte, I noticed one part of out-of-state tax-exempt interest dividend(which is transferred from Trust K-1) is added to taxable interest on Sch CA and another part is added to Ordinary dividend...I got a little confused. Where it is supposed to be added? Depends on whether reported as interest or dividend (e.g. Mutual Fund.) Out of State either taxable to CA. 

Another question is is there anyway to check why there is an addition for taxable dividend on Sch CA? Right click on the amount in forms view and select Jump to Input. II transferred K-1 and there is an addition for dividend. I want to understand where it comes from. I think it is probably about the out-of-state tax-exempt interest dividend. But not sure it is that number...

Hope someone can help me. Thank you!

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You have to trust that the K-1 is properly prepared and just enter what they give you. I am assuming the scanned a K-1 and had Lacerte do the import. Hold the K-1 in front of you and review the input to see if it matches. You are right to not trust the import.