Based on the lacerte & IRS alert issued today regarding Sch D worksheet being incorrect for lines 18-20, is there a way to filter and identify which clients this effects?

[sarah-m-dyson]

In light of the alert issued today by the IRS and lacerte, is there a way to identify in lacerte which clients this may affect?  We have grouped by those that filed a sch D, but want to see if we could get more specific (those that have items on line 18-20) without going through each return.   Would like to give clients a heads up they may be receiving IRS correspondence and a potential change in tax liability.

The IRS has informed us that the Schedule D Tax Worksheet for Forms 1040 and 1041 were not properly taxing certain capital gains at the new lower 2018 tax rates, but instead the worksheet was taxing them at their maximum rate of 25% or 28%. Forms 1040, 1040-NR, 1041, and 990-T use these worksheets to calculate regular tax in certain instances. The IRS has released newer versions of these worksheets which should be released in Lacerte version 39.0516.

The IRS will review returns filed prior to May 16 to determine any needed corrections. These taxpayers do not need to file an amended return, call the IRS or take any other action at this time.

[abctax55 · Accepted solution]

I spoke to Austin (at Intuit) today & they may come up with a way to data mine the client base to see who's impacted.

MY plan (after several back-ups) print out a data base report of all clients with Sch D exposure & include the tax liability.  THEN  -  after the update implementing the new Sch D worksheet is installed  - I'm going to unlock the potentially impacted returns & reprocess them.  I'll rerun the same report & see if anything changes.  That should identify which specific clients are impacted.

Cumbersome?  Yes.   

I haven't looked at filters (not my strong suit...) to see if there may be a better way.  The chatter is that only/mainly returns with § 1250 gains are impacted.

A caveat is that for a good part of this year, there were issues with pulling client reports when returns were locked.  If that's still the case, some might get missed.   

Another possibility is change the display to show which clients had Sch D, then highlight those & print a report.

Cumbersome?  Yes.

[pat]

I just updated my display to include Schedule D and am comparing it to my printed list that I have also updated to included Total Tax. Thanks all!

[abctax55]

Ain't this gonna be fun
Be sure you do have good backups before unlocking, as the update addressing this "should" change returns with the incorrect worksheets.

[pat]

Select all of your clients from the client list - there are instructions somewhere on this site to do so and is easily found with a search. 

Once your clients are selected, go to Print, Database reports, Custom. From the available list, choose (by double clicking) Client Full Name, last name first, Current Status, Capital Gain, Schedule D. 

The report this creates with all of your clients included but it will at least tell you who has a schedule D included on their return.

[abctax55]

There have been issues this year with pulling reports the way described above; locked returns are sometimes 'skipped'.   YMMV