Intuit's treatment of Form 1041

[appelman]

I have been having an ongoing battle with Intuit regarding their implementation of Form 1041 for a complex trust in Intuit Tax Online. The facts are the following:

Form 1041:
line 1 -- 43
line 2a -- 10,316
line 4 -- 34,538.
line 9 -- 44,897..
line 16 -- 6,025

Schedule B:
line 1 -- 38,872.
line 2 -- 1,557.
line 3 -- 34,538.
line 6 -- -34,538.
line 7 -- 40,429.
line 11 -- 40,000

Tax-exempt interest is the only tax-exempt income. The question is, what goes on line 12 of Schedule B? From the instructions to Form 1041:

"If tax-exempt interest is the only tax-exempt income included in the total distributions (line 11), and the DNI (line 7) is less than or equal to line 11, then enter on line 12 the amount from line 2. If tax-exempt interest is the only tax-exempt income included in the total distributions (line 11), and the DNI is more than line 11 (that is, the estate or trust made a distribution that is less than the DNI), then figure the adjustment by multiplying line 2 by a fraction, the numerator of which is the total distributions (line 11), and the denominator of which is the DNI (line 7). Enter the result on line 12."

From this, we calculate: (line 12) = (line 2) x (line 11)/(line 7) = 1540. Intuit, however, uses the relation: (line 12) = (line 2) x [(line 11) - (line 3)]/[(line 7) - (line 3)] = 1444. I can see no justification in tax law for Intuit's calculation. Can anyone else?

[TAXNJ]

2nd Tier

Did you ask the tech rep that you want the issue escalated to their 2nd Tier, which are the EA,CPAs to bring up the issue?

If you know the correct answer and their software is wrong ask them if you can "override" the field(s) and/or correct with an update.

Interesting so let us know the result.

[TAXNJ]

Sch B

Did you look at the sch B "Trust Accountimg Income worksheet" for any "Adjustments to Trust Accounting Income" allocating between beneficiaries and estate/trust?

Tough to work without $ detail of lines in post

[appelman]

Escalation, etc.

Following your suggestion, I've gone the escalation route again, though I seem to recall doing it before without much success. Of course, you can always override, but I came to Intuit because they seemed to know for the most part what a 1041 was all about, whereas with Drake, I was entering so many overrides that I was practically doing the return by hand!

[TAXNJ]

By hand

Following your suggestion, I've gone the escalation route again, though I seem to recall doing it before without much success. Of course, you can always override, but I came to Intuit because they seemed to know for the most part what a 1041 was all about, whereas with Drake, I was entering so many overrides that I was practically doing the return by hand!

Sometimes it gets to the point of fighting the software it may save time doing it without the software

[Burke]

I input your figures into my software (ATX) and got the same thing you did, $1,540.