We have a client that is taking the standard deduction, plus they had a casualty loss. We took the standard deduction, $600 (MFJ) and added the casualty loss. Now the IRS has sent a letter removing the $600 charitable. Has anyone seen this?

[Just-Lisa-Now-]

Casualty loss? or NOL?

[GLS]

It was a casualty loss due to a qualified federal disaster.  

[Just-Lisa-Now-]

Did the 600 get deducted on the front page of the 1040 as well as get included on Sch A somehow?

[GLS]

No the IRS is just ignoring the $600 from the front page.  I wonder if there is some kind of software issue on their end.  Proseries shows the standard plus the casualty on a special Sch A.  Maybe the IRS "thinks" they are itemizing because of that and not allowing the $600 from page 1????

[Just-Lisa-Now-]

Thats possible.

[George4Tacks]

What is the number on line 12a of the 1040?

[GLS]

Line 12a is $28,204 which is $26,450 plus the casualty loss of $1,754.  We added the $600 on line 12b.  The IRS is ignoring the $600.

[rcooley25]

No it does not. If you list a charitable contribution on schedule a then at least on pro series it will show up as an error so you cant claim both.

[GLS]

That is correct we are not taking the charitable deduction twice, but the IRS is saying its a math error.

[George4Tacks]

@GLS  It is a math (operator) error. You do not get both. Look at the complete return and I believe you will see that there is a Schedule A. You do not get the $600 in addition to the total Schedule A amount.  I betcha dollars to donuts that you have lots of numbers on that Schedule A, not just the casualty loss. 

Also look for the error check that should tell you this same thing. 

[TaxGuyBill]

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@George4Tacks wrote:

@GLS  It is a math (operator) error. You do not get both. Look at the complete return and I believe you will see that there is a Schedule A. You do not get the $600 in addition to the total Schedule A amount.  I betcha dollars to donuts that you have lots of numbers on that Schedule A, not just the casualty loss. 

Also look for the error check that should tell you this same thing. 

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The Casualty Loss is added to the Standard Deduction.  It is NOT considered as Itemizing.

As was mentioned, I also suspect it is an IRS software error.

[ljr]

Did the casualty loss make the itemized deductions more than the standard deduction? If so, then you are taking the $600 twice. Once included on schedule A and again on page 1. But I would think that this would have been found on an error check - not sure how it could go through both ways.

[GLS]

No the casualty loss did not make the itemized deductions more than the standard deduction plus the casualty loss.  I believe it is an IRS software error.

[clr600]

What do you mean a special sch A???