Wow that's really fast to be getting letters already.  Did the returns you filed show a NOL being allowed on Form 124 because it was not until about 3/1 that Lacerte seemed to get it updated the way I think it should be done.  I got an email from IDOR on 2/29 saying they were researching the 124 calculation question I sent and that they hoped to answer me on 3/1 or 3/4.  Nothing yet.  I will follow up with the rep.

After today's software update, there is a box on Screen 15 Current Year (just below the box you pointed me to the other day) where you can now override the Part II line 4 calculation!  BUT I put in my override and so I have like $90,000 in line 3 and $47,000 in line 4.  Then line 5 says to enter the lesser of Line 3 and 4 and Lacerte puts in $4000 (what they were previously calculating for line 4). So still not a fix.  I will try the calculation challenge link they gave me.

Iowa is supposed to be calling me back about how that is supposed to be calculated.  In the meantime, I just spent 2 hours on the phone with Lacerte.  So far they are maintaining that the calculation is correct per the instructions.  But I can submit a challenge to the calculation.  I'll wait and see if I hear from IDOR today to confirm my thoughts are right.  

I spoke with IDOR and am supposed to get a call back from someone who knows more.  While talking with her though, I'm thinking it is a Lacerte issue.  The instructions say line 4 of Part II is IA1040 line 4 (without accounting for the Iowa pre-2023 NOL adjustment from Schedule 1).  I was reading that as "without accounting for the NOL adjustment".   But if we can keep the federal NOL adjustment in that calculation, then yes, my client's income is a large positive number on IA1040 line 4 and I would think should show up on the IA124 Part II line 4 and allow a large Iowa NOL.  Is that what you are thinking? If I get that call back from IDOR I will update and maybe we need to call Lacerte.

Great, that fixes that part.  To populate a different Iowa NOL for Line 1 of Part II, you can do that in the Iowa Net Operating Loss section of Screen 15. As to Line 4 of Part II, in the instructions to the 124, it says it comes from line 4 of the IA1040 (without accounting for the NOL adjustment).  As far as I can tell, Lacerte is doing that.  I just looked at one and if I take the IA1040 line 3, then go to Iowa Schedule 1 and make the adjustments except for the NOL lines, it comes up with the same number as on the 124 line 4. So maybe Lacerte is doing it right according to instructions?  BUT, I really question if this is Iowa's intended outcome.  I have a client with a large NOL.  His line 4 income without the NOL adjustments is negative, so $0 on 124 Part II line 4.  The effect is $150,000 of federal NOL being added to income, and no Iowa NOL being deducted.  So he is paying Iowa tax on $150,000 NOL! Maybe that's right but it feels very wrong. Of course this is a March 1 farmer.  I sent an email to IDOR, but they probably won't answer fast enough.  I might try calling.

Okay, things that are just hers are marked US.  But there is a joint investment account showing half and half dividends on the Iowa form.  I could just leave it alone, or has anyone divided a 1099-B into two entries?

So the bulk of the assets involved do not depreciate.  But does that make this non-passive income?  They are not selling it. My question is shouldn't the program default Form 8825 income to passive, unless I check the box that it is not passive?

That's what I'm thinking as I've been typing out a memo- that the sale has to go on an amendment.  Was just checking to make sure I couldn't somehow incorporate the sale into the 3115 but I don't think so. So I guess I start amending at 2019 and work my way up, hoping I don't miss transferring any changes to each successive year 😢

In Screen 1 Iowa is selected for e-file.  When I go to the Diagnostics Tab there is a critical diagnostic "Iowa is not included in this version of the program..." I know it is a result of the last update, as I have sucessfully e-filed two IA 1120-S prior to it without the diagnostic.  And, a co-worker came to me after the update saying she had this diagnostic.  I looked at the same return on my computer and did not have the diagnostic.  I then ran the update and it appeared on my computer too.