I can't reconcile the F1116 Gross Income from All Sources against 1040

[Reinafe]

The Worksheet shows the breakdown of the Gross Income from All Sources and everything matches (W-2 income, interest, dividends) except for the capital gains.  The capital gains per Form 1116 is $646 higher than the capital gains per Schedule D/Form 1040.  I have checked my entries from the 1099-Bs and the 1099-Div and cannot find where the $646 is coming from. Any ideas?

[itonewbie]

PTO does the reconciliation pretty well but it depends on whether you made the underlying entries for income, losses, and expenses correctly.  Take a look at the Worksheets and you'll find how the numbers tie to F.1116 and F.1040.

One of the key things to remember that deductions are mostly allocated based on gross instead of net income.  If you have capital gains and losses, you'll see that losses are not taken into account in that computation.

[itonewbie]

If you make summary entries on F.8949 for net gains/losses, you'd need to make additional entries on F.1116 to adjust for gross income.  In case you have foreign source capital gains, you may also need to adjust for capital gain tax rates differences.