Fom 8960

[Christian]

I am lost in the labyrinth of the Form 8960 instructions. As I read it state income taxes attributable to investment income is deductible against that income to compute the Net Investment Income Tax. In attempting to enter the figure I am referred to an Orwellian table. Do I need to use a Schedule A to get this credit ? As a large chunk of the tax was paid in January it cannot be claimed on the 2020 Schedule A. I am considering simply overriding this field for the client as he certainly paid Virginia tax at the 5.75% rate on this income.

[Christian]

After attempting this it provides no reduction in the tax due. Therefore no point in doing it. 

[Lee B]

It's interesting looking at several online third party instructions.

Apparently the SALT limitation impacts the allocation which would significantly reduce the amount deductible for state and local taxes

especially if you are in high property tax state. Remember the days when we could deduct Investment Interest.