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State tax refunds on Form 1041 and Tax Benefit Rule

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Level 1

Why doesn't the 1041 program consider the tax benefit rule for state tax refunds?  If a trust was limited to a $10,000 state tax deduction in 2018, why should it then report the refund as income in 2019?

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Level 11

It shouldn't, but it is not programmed like the 1040.

Do it manually; enter the refund as income, then back it out "As per Rev. Rul. 79-15, no tax benefit."

You can see I'm old since I have been doing this since 1982, and I still remember RR 79-15.

** I'm still a champion... of the world! Even without The Lounge.

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Highlighted
Level 11

It shouldn't, but it is not programmed like the 1040.

Do it manually; enter the refund as income, then back it out "As per Rev. Rul. 79-15, no tax benefit."

You can see I'm old since I have been doing this since 1982, and I still remember RR 79-15.

** I'm still a champion... of the world! Even without The Lounge.

View solution in original post

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Level 1

Thank you for responding!

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Level 11

YW, and thank you for thanking me.

** I'm still a champion... of the world! Even without The Lounge.
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