Question

1040 item 16 from turbotax may be wrong?

Forum|Forum|3 years ago
April 9, 2023
1 reply
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Hi, everyone

I run into a trouble for 1040 line 16 and am desperately looking for help . I suspected that turbotax number is incorrect. Here is the basic numbers I have: (file married jointly)

1a. (W2) $285K

7. I sold a rental property with a capital gain about 235K (include $14K depreciation recapture)

8. I also suffered a passive rental income loss of $236K (based on TurboTax 8582)

12. I choose the standard deduction with $26K

15. My taxable income is about $260K

I expect $50k in line 16. However the trubotax reported only about $31k federal tax.

Does anyone can explain what happed here?

T

ThomasM125

I ran your numbers up on TurboTax and came out with about $50,000 in tax as you said. If you are working with the desktop version of TurboTax you can look on the Form 1040-SR Worksheet where you will find the Tax Smart Worksheet about midway down the form. It may show how the tax was calculated.

Otherwise, you should be taxed mostly on your wages as the capital gain on sale of rental property being passive income would offset the passive rental losses leaving the wage income of $285,000 less that standard deduction of $26,000 or about $260,000 of taxable income. The tax on that would approximate $50,000. You can look on your form 1040 and see if your wage income shows on line 11 as adjusted gross income. All I show is the wage income on line 11, the standard deduction on line 12 then the taxable income on line 15. If you show that and a tax of $31,000 on line 16, then there most be someting else listed on your tax return or the tax is being based on capital gain income for some reason.

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