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Claim of right of repayment over $3,000

Forum|Forum|2 years ago
April 8, 2024
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I found the help on this subject which says:

"...

After you enter the updated income, TurboTax will automatically calculate your updated tax liability. To determine your Claim of Right Credit, subtract the amount of the updated tax liability from the original tax liability. Next, you’ll apply the credit. To do this, you’ll need the current year of TurboTax CD/Download.

Applying the credit

Return to the current tax year (The credit can only be applied using the Forms mode in the TurboTax CD/Download product). Select the Forms icon. Choose 1040/1040SR Wks from the list on the left and the worksheet will appear. Scroll down to the Other Credits and Payments Smart Worksheet (you can find this in a box near the end of the worksheet).

..."

AND I have gone into the form and put the RESULTING difference in tax liability into the form.

BUT I also find in the Deductions & Credits section under a page for "Less Common Expenses" -->

Tell us about your other expenses

In some situations these amounts must be adjusted for the calculation of Net Investment Income Tax (NIIT). TurboTax does not support these adjustments.

Unrecovered investment in pension $_____________

Claim of right repayment over $3,000 $____________

Estate tax deduction not reported on an estate K-1 $___________

Ordinary loss attributable to certain debt instruments (such as treasury inflation-protected securities) $_______

Amortizable bond premium $____________

SO my question is this ...

how does the instruction to go into the form and put the value in and this page interact?? Do I do both? Do I do one OR or the other? Do I ignore one and do the other? and if I use the page labeled "Tell us about your other expenses" what do I put in the second line for the Claim of right repayment over $3,000? Do I put in the value of the repayment of the change in the tax liability?

Best answer by Mike9241

the rules for claim of right repayment under IRC 1341 depend on the year the income was received and the year of repayment. if the same year the amounts should be netted. if repayment is in the current year for income reported in a prior year and is over $3000, the taxpayer has an option

1) take as an itemized deduction in the year of repayment on schedule A or

2) recompute the taxes for the year received by properly eliminating the repayment amount from income. This could be box 1 of w-2 or some other form (if this is a business repayment IRC 1341 doesn't apply. The taxpayer takes a business deduction on the same schedule the income was reported in the prior year). the difference in taxes between what was originally filed and the recomputed taxes is taken as a credit on schedule 3 line 13b

D

DavidDwightAuthor

adding to the above ... it looks like the page in the software I mentioned above puts the value in Schedule A - Line 16 and labels it "CLAIM REPAYMENTS"

D

DavidDwightAuthor

and then it puts it in as a negative number on the Income Summary in the Unemployment section as if it was a 1099-G

Probably a bug???!!!

M

Mike9241Answer

the rules for claim of right repayment under IRC 1341 depend on the year the income was received and the year of repayment. if the same year the amounts should be netted. if repayment is in the current year for income reported in a prior year and is over $3000, the taxpayer has an option

1) take as an itemized deduction in the year of repayment on schedule A or

2) recompute the taxes for the year received by properly eliminating the repayment amount from income. This could be box 1 of w-2 or some other form (if this is a business repayment IRC 1341 doesn't apply. The taxpayer takes a business deduction on the same schedule the income was reported in the prior year). the difference in taxes between what was originally filed and the recomputed taxes is taken as a credit on schedule 3 line 13b