jlewis Posted April 13, 2015 Report Share Posted April 13, 2015 I think by your posts you are currently using Drake and I have a question regarding form 1116 with Drake. 1116 instructions are pretty skimpy on what entries go on line 3b. ATX put medical (if any) & real estate taxes on 3a and basically rest of Sch A deductions on 3b with 1040 adjustments automatically. Drake does not seem to automatically fill in 3b, you have to use override screen for 3b entries with a schedule. Talked with Drake support this morning & appears they think 3b only includes something like alimony, only item mentioned in instructions. Would like to hear from other former ATXers comments using Drake their interpretation of what goes on form 1116 line 3b. Thanks for any responses Quote Link to comment Share on other sites More sharing options...
jklcpa Posted April 13, 2015 Report Share Posted April 13, 2015 I can't adequately answer your question beyond what is in the instructions for Form 1116 because I don't know the other items that you are reporting on the return. Are there any other deductions from gross income that aren't directly related to any specific income? Quote Link to comment Share on other sites More sharing options...
jlewis Posted April 13, 2015 Author Report Share Posted April 13, 2015 Drake doesn't put anything from Sch A in 1116 line3b where ATX will input state/local income taxes, personal property tax, charity, any misc item deductions allowed, and 1040 AGI deductions (SE tax, SE health ins, SE retirement, alimony, etc.) Like I said earlier 1116 instructions very skimpy about line 3b, only example is alimony. I moved to Drake for 2014 & kept ATX PPR just in case, did same return in both, got same results except for way 1116 came out with Drake not automatically filling out 3b. I don't know which software in correct, from skimpy 1116 instructions. jklcpa, do you have any thoughts about what normally goes on line 3b from Sch A deductions? Quote Link to comment Share on other sites More sharing options...
jklcpa Posted April 13, 2015 Report Share Posted April 13, 2015 form 1116, line 2 - put any expense deductions directly related on this line. Those might include state income taxes directly related and investment expenses on Sch A (for example - investment advisory fees for a portfolio that holds all foreign investments) line 3a - those indirect expenses from A that are listed in the instructions - medical, r.e. taxes, general sales tax line 3b - any other indirect expenses from A that aren't on lines 2, 3a, (but not any interest, it has separate lines) plus any deductions on form 1040 on lines 23 - 35 lines 4a and b - prorata share of mortgage interest and other interest. You might find pub 514 helpful, especially around page 16. I think you are getting hung up on this because you have to do some thinking and input a few numbers, and because you don't know how to prepare it and have 2 programs that you are trying to rely on to do the work for you instead of understanding the process. If you understand the goal, maybe it will become clearer about what goes on the form. Take a step back and look at the entire form and you'll see that what the form does is takes all the deductions and breaks them up into pieces and comes up with the portion that applies to the foreign income. Quote Link to comment Share on other sites More sharing options...
jlewis Posted April 13, 2015 Author Report Share Posted April 13, 2015 You are right I was getting hung up, but because I was trying to find out why Drake would do 3a automatically but not 3b. It didn't make sense that they had the info for both but would only do one. I understood what should be there, didn't understand why Drakehad the info but would only do small part of whole picture. Thanks for your assistance. Quote Link to comment Share on other sites More sharing options...
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