State Itemized Deductions with OIH

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This probably applies to most states.

Scheule C with a loss. So, home office expenses are disallowed (and carried forward.)  The Standard Deduction for Federal is taken.

My CA 540 shows less than the full amount of RE Taxes and Mtg Interest. Why wouldn't the full amount get deducted? I have stoopid Monday mind or LC is wrong.

Update: LC programmers are reviewing this.

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The software reduces the RE taxes and Mortgage interest on Sch. CA by the amount disallowed (due to the loss on Sch. C). I had assumed that it would optimize as it is a better tax benefit to increase itemized deductions than take a non-deductible home office.

So I learned that it doesn't optimize. Also learned that her failing business (book sales) likely won't be profitable in the future and so the disallowed home office deductions won't ever provide a tax benefit.

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I called tech support because I thought this was a bug. I still think it is.  They wanted me to hang on the phone and I could not so I don't know if the programmers will be researching this issue.