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Should Form 1116 Line 3e include net or gross capital gains?

davetodd11
Level 3
I am taking over a trust clien/1041 return, and don't have experience with the Form 1116.  To ensure I've got everything accounted for, and establish a historical record for the trust in ProSeries in preparation for next year, I've taken the source docs that were used to prepare the 2020 return and compared my results to those of the previous tax accountant.  In ProSeries, Form 1116 Line 3e cross-references to Form 1041 Line 9.  However, the previous preparer used a separate worksheet to calculate the line 3e amount and excluded the gross capital losses from their 3e total.

The IRS instructions for Form 1116 indicate that line 3e should include " ... capital and ordinary gains (before subtracting any losses) ...", which seems to coincide with what the previous preparer was doing, but contradicts what ProSeries is doing.  Is this line one that ProSeries is just miscalculating, and needs to be overridden?
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sjrcpa
Level 15

Previous preparer was correct. Software output is wrong.


ex-AllStar

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PATAX
Level 11

Maybe get the original Source documents and enter the information directly from there and see if you can match up... Also in 1040 module I believe you don't have to print out the actual 1116, maybe same for 1041, I don't know.. Hope this helps

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davetodd11
Level 3

I've taken the source docs that were used to prepare the 2020 return

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sjrcpa
Level 15

Previous preparer was correct. Software output is wrong.


ex-AllStar

View solution in original post

davetodd11
Level 3

Thanks for confirming.  The more I dug into it, that seemed obvious, but I thought maybe I was just missing something.  I was trying to report it to Intuit to have them look into the error, but there doesn't seem to be a way to reach them outside of these community message boards.  Is there a way.

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