Is the Investment Expenses in Part II of Form 8960 limited to what's deductible on Schedule A?

[meilinyu-cpa]

That is, only maximum of $10,000 can be offset to Total Investment Income for the Tax Computation of Net Invement Income Tax?  Also, there's no deduction against the Total Investment Income because it is no longer deductible as Misc Itemized Deduction, right?

[sjrcpa · Accepted solution]

Yes to both questions.

[meilinyu-cpa]

Thank you.  I see that I can also deduct Foreign income tax not claimed as foreign tax credit.  Do you know how I can input the foreign tax paid in Proconnect so it gets added to Investment Expenses Allocable to Investment Income?  

[sjrcpa]

It's still part of the $10K limit so I don't think it matters.

[sjrcpa]

If you already have it entered as a Schedule A itemized deduction I think the software will do its thing correctly.

[meilinyu-cpa]

Thank you!