Form 8992 calculation is incorrect. If Part II Line 3 is negative amount, the negative amount should not flow to Form 1040 Schedule 1 Line 21 and/or Form 1120.

Forum|Forum|6 years ago
December 7, 2019
18 replies
77 views

Lacerte Tax

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Best answer by itonewbie

Lacerte seems to be computing Line 3 in both Part I and Part II correctly. I can't see how Part II, Line 3 can be negative based on the Code and mathematically, how the form is set up.

If Net CFC Tested Income is negative, it doesn't flow to Part II. NDTIR also cannot be negative; when Specified Interest Expense is larger than DTIR, Line 2c would just be zero. The end result is that Line 3 of Part II would be zero and nothing will flow to Line 21.

Can you post the amounts you have on the form?

itonewbieAnswer

Level 15

Lacerte seems to be computing Line 3 in both Part I and Part II correctly. I can't see how Part II, Line 3 can be negative based on the Code and mathematically, how the form is set up.

If Net CFC Tested Income is negative, it doesn't flow to Part II. NDTIR also cannot be negative; when Specified Interest Expense is larger than DTIR, Line 2c would just be zero. The end result is that Line 3 of Part II would be zero and nothing will flow to Line 21.

Can you post the amounts you have on the form?

---------------------------------------------------------------------------------Still an AllStar

R

rhuang9914

Level 2

We assume below: Part II Line 1 - $500,000; Line 2a - $600,000; Line 2c - $600,000; Line 3 will be -$100,000 (negative amount calculated by Lacerte). When Line 3 is -$100,000, the amount will flow to Form 1120 Schedule C Line 17 and the negative amount will offset taxable income.
If it's individual, the amount will flow to Schedule 1 Line 21 Other income.

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