Question

Where do i enter investments expenses that are deductible on form 8960

Forum|Forum|3 years ago
February 20, 2023
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Form 8960 allows me to deduct various Investment Expenses. Where do i enter these so that they get transferred to Form 8960?

I paid foreign taxes on my foreign income from RICs. This was handled correctly on Form 1116. Why wasn't this amount deducted on form 8960?

I paid state taxes on my investment income. How do i get those taxes entered on Form 8960?

DawnC

Employee

Under the new tax law, other investment expenses aren't deductible on your federal return, but some states still allow you to deduct them on your state return.

To enter these expenses, go to Deductions & Credits, Other Deductions and Credits. The first question asks about generation-skipping taxes, and the next page is where you can enter your investment expenses. Anything that is deductible on your federal return will be subtracted on Form 8960. The amounts you enter will be transferred to your state return and deducted there if your state allows them.

Form 8960 - Net Investment Income Tax

You may not take a deduction for any foreign income taxes paid for the tax year on Form 8960 if you took credit for any portion of them on Form 1116. See instructions, Form 8960.

Form 8960 IRS instructions.

To enter the state taxes that you paid, follow the instructions in this link. This is an itemized deduction that is limited to $10K for all state and local taxes (sales tax, real estate tax, and personal property tax) paid. These will go to Schedule A. The miscellaneous itemized deduction for investment expenses is no longer deductible on Form 8960.