qualified dividend adjustment for foreign source income and investment interest

[Mike V]

Lacerte is not adjusting qualified dividends from foreign source income on Form 1116 line 1a if the taxpayer also has investment interest deductions on Form 4952 leading to schedule A.     This appears to be incorrect according to the IRS instructions.    We have called three times but can't seem to get a good answer.     All Lacerte programs prior to 2020 have adjusted the qualified foreign dividends.

I am currently doing the calculation myself, and overriding in screen 35.     Has anyone else run into this?

[Couls Law]

I know this an old thread but the IRS changed the instructions to the Schedule D Tax Worksheet in 2020.  The very top of the worksheet now reads:

Complete this worksheet only if line 18 or line 19 of Schedule D is more than zero and lines 15 and 16 of Schedule D are gains or if you file Form 4952 and you have an amount on line 4e or 4g, even if you don’t need to file Schedule D. Otherwise, complete the Qualified Dividends and Capital Gain Tax Worksheet in the instructions for Forms 1040 and 1040-SR, line 16 (or in the instructions for Form 1040-NR, line 16) to figure your tax. Before completing this worksheet, complete Form 1040, 1040-SR, or 1040-NR through line 15.

If you don't use the QDCGT Worksheet then you don't have to adjust foreign source qualified dividend income.