lacerte treatment of state tax refund in fiduciary module
View More DetailsLacerte includes the entire state tax refund as "other income" on Form 1041 regardless of application of tax benefit rule for 10K "SALT" limitation in prior year. This appears to be incorrect, for example, 50K paid to FTB during 2020 for 2020 CA tax, 10K deducted on 2020 Form 1041, CA 2020 tax 20K and 2020 CA refund 30K. Lacerte includes 30K on 2021 Form 1041 as taxable state tax refund. 2021 taxable amount should be zero (no tax benefit)?
Comments
The tax benefit rule applies to trusts the same way as individuals. You just have to do the calculation manually - Lacerte doesn't do it for you in the 1041 program.