Anybody else having problems with Schedule D?

[samingeorgia]

I'm doing a return for an older couple. They have some income from pension, W-2, interest, etc. and a capital gain on Schedule D. For some reason Line 43 (taxable income) has a balance under $ 1,000 so 10% bracket. But line 44 shows zero tax. If I open the worksheet there is an "X" in capital gain worksheet but no amount. The regular tax shows on the first line but everything else is zero.

I update frequently, and have discarded the return and started over with the same result. I called support yesterday morning and they had me transmit the return to them, but no response yet.

Any ideas?

[TAXBILLY]

The tax rate was cut to zero in your case so it is correct. Follow the worksheet for that line.

taxbilly

[zeke]

I had the same thing this a.m. Went to Sch D. Went to tax worksheet. Read entry indicating that 5% tax reduced to -0- for 2008.

z

[JRS]

The current ordinary income tax rates for individuals are 10%, 15%, 25%, 28%, 33%, and 35%. Certain capital gains and qualified dividends (i.e., adjusted net capital gains) are taxed at 15%, or 5% for taxpayers in the 15% or 10% tax brackets. Pursuant to the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) and extended by the Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA), the 5% rate drops to 0% from 2008 to 2010. In 2011, these rates will sunset and revert to the pre-2001 rates of 15%, 28%, 31%, 36%, and 39.6%. Qualified dividend income (i.e., dividends from most domestic corporations and certain qualified foreign corporations) will lose its favorable status, and capital gains rates will revert to pre-2003 rates, generally 20% (10% for gains in the 15% bracket) and the special five-year holding period rules.

[Ray in Ohio]

It seems weird to actually have "taxable income" but it results in zero tax.

But that is actually how it looks on 1040 page 2, and it can be correct that way if all of the "taxable income" is long term CG and the taxpayer is in the 10% - 15% tax bracket.

[samingeorgia]

OK, thanks to all who replied.

Capital "gains" -- ah, it makes one nostalgic....

Edited to add: I went back and checked and y'all are right (not that I doubted you, I just had to see it for myself -- auditors, ya know). It sure does look peculiar.

[TAXBILLY]

It threw me the first time until I checked the worksheet and remembered the 0%.

taxbilly

[joanmcq]

My boss at work was going through a return for hours trying to figure it out. They had a lot of qualified dividends; all their income was dividends. No tax.