2023.019 release information

Pending releases

Form 7205
, Energy Efficient Commercial Buildings Deduction
Form 8308
, Report of a Sale or Exchange of Certain Partnership Interests

1065 Partnership

Federal

We added data connection to
Schedule B, line 10
.
There's now a print option to suppress the
General Dependency statement
.

1120 Corporate

New Jersey

International

New ONESOURCE API Features for International

Chart of Accounts Cross-reference
5471 Schedule M Cross Reference
5471 Schedule C Cross Reference (OCI)
Foreign Income Taxes

Foreign tax credit (FTC)

The
apportionment of interest expense between 245A dividends and other income
generate unexpected results in cases where the interest expense is being apportioned using base code 408 (Affiliated - Non-Financial). Instead of building the split between 245A and Other using the 408 Base, the system calculates the ratio using base 409 (Affilitated - Financial). This can generate unintended results for the split. Note that the calculation of the Internatl Apportionment using 408 is correct, it's only the split between 245A and Other that's impacted. Other Interest Bases (407 - Post 1986 Affiliated Assets Base and 409 - Affiliated Financial) are also not impacted.
The
addback of Section 245A deductions
sourced to FOGI are included in the FOGI limitation calculation under Section 907. To change this, enter the desired limitation amount in the Organizer.
When there are only pre-2018
overall domestic losses (ODLs) in the Taxable Income Adjustment screen
, the FTC calculations determine the potential ODL allowed for recapture by aggregating separate potential ODL allowances calculated for both pre-2018 (taxable US income multiples by the pre-2018 ODL recapture rate on the FTC Defaults screen) and post-2017 (taxable US income multiplied by 50%). Use the pre-2018 and post-2017 columns on the Recapture Overrides tab in Taxable Income Adjustments to override the system.
Beginning with 2021.075,
FTC computes will use a gross receipts method
to apportion research and experimental deductions. The Apportionment Base Audit Trail Report (TIBS) refers to Base 405 as Sales by SIC but will calculate gross receipts by SIC.
TIBS warning messages 2427 and 2428 were introduced with the
Section 250 transfer to income sourcing
to warn you when Section 250 FDII or GILTI amounts have been computed, but there's no account type in the International Summary Chart to transfer the amount. These warnings won't trigger in a division sourcing at the Divisional Consolidation level. Other entity types will generate the expected TIBS warnings. The best way to avoid issues with the transfer of Section 250 amounts to the Income Sourcing workpaper is to review the TIBS FDII reports related to Section 250.
Form 1118, Schedule A
- In cases where the combination of country code with no EIN or reference ID doesn't exist in the Income Sourcing workpaper and amounts are transferred to Schedules C, D, or E, a row will transfer to Schedules A and B, Part I that'll show the country code with no other amounts. There's no workaround; this row shouldn't impact the e-file.
Form 1118, Schedule B, Part II, line 8b
amount doesn't carry from Schedule H. After the last International TopCon Compute, override the amount on the tax form for each separate category, lock the data entry, and then perform a full recompute.
Form 1118, Schedule E
- The FOGI dividend is included twice in Part I. You must manually enter information in Part II if the taxes have carried from lower-tier entities. See Form 1118 instructions for details.
Form 1118, Schedule J
- Calculated amounts for Part I, column v (other income), line 2e (allocation of separate limitation losses: other income) and line 9e (recharacterization of separate limitation income: other income) may not be correct when both sides of the transaction are in the Treaty or 901J basket.
Form 1118, Schedule K
- Where FTC carryovers have been entered in the TopCon's FTC Carryovers screen and the consolidated group has a current year OFL or ODL, FTC Compute error 9999 related to FTC_Carryover_SchK_AuditTrail will generate.
For CY OFL, either enter at least 1 of ODL balance in the TopCon's Taxable Income Adjustments screen (this one will have to be manually overwritten with NONE in the Sch J Organizer screen to get the expected results for Schedule J) or remove the FTC Carryovers and manually enter expected Schedule K in the Organizer.
For current year ODL, remove the FTC Carryover beginning balances from the FTC Carryovers screen. Manually enter Schedule K expected results in Organizer.

Compute

Allocation of current year taxes paid/accrued by basket
and transfer to Form 5471, Schedule E and Form 8858, Schedule J for tax year 2018 and later. When a dividend consolidation enters sourcing and taxes at the division level but processes intercompany transactions at the divisional consolidation level, the divisional consolidation account ratios are used to spread both the divisional consolidation and division amounts.
Boycott factor for CFCs may yield incorrect subpart F income and deemed paid taxes.
Use of the boycott factor on the International tab of a CFC's binder properties yields incorrect results for subpart F income, deemed paid taxes, and amounts reported on the Summary Report for US Shareholders. The IRS-prescribed method of specific attribution (Form 5713, Schedule B) yields more accurate results when calculating the effects of participating in, or cooperating with, an international boycott. The system facilitates the use of this method by using source codes that have a subpart F type designated as 8 - Boycott Related. Such source codes may be used in a CFC's sourcing workpaper to specifically identify boycott-related income, expenses and/or taxes. Expenses and taxes also may be apportioned to boycott-related income through the use of Apportionment Base Codes.
The
calculation of the return of capital
amount transferred to Form 5471 and/or 8858 Organizer Schedule H page and reported on Form 5471, Schedule H by Basket Report may be incorrect if any of these conditions apply. To resolve, enter the desired values in Organizer. Go to Organizer, Foreign Information, Foreign Corporation, Foreign Corporation, {Entity Name}, INTL Transfer Options or Organizer, Foreign Information, FDE and FB, FDE and FB {Entity Name}, INTL Transfer Options, and select Schedule H to prevent subsequent International Compute from changing the manually entered Schedule H amounts.
Accounts in the Federal Chart aren't mapped to the International Summary Chart; or
Trial balance amounts are overridden in the Income Sourcing Workpaper; or
Amounts are eliminated during look through calculations due to circular transactions; or
The entity is full inclusion and some non-subpart F source codes are high tax.
Dividend depletion at the payor level and dividend income in the recipient isn't correct
when any of the following are present. Review the payor's E&P Pools Report and the recipient's E&P by Source Code - After Dividend Look Through Reports. If there's issues, remove the transaction and override Form 5471. After rollover to the next year, post adjustments to the E&P Pools.
Current year earnings and profits are negative; and
Overall post-86 959(c)(3) accumulated earnings & profits (beginning balance plus current year earnings) are negative.

Reports

These
reports will be updated in an upcoming release
to incorporate the GILTI reclassification calculated on the E&P Pools Report and the correct ending balances for the PTI in USD.
Post 86 E&P by Year Detail Report (tax year 2018 and later)
Post 86 E&P Audit Trail Report and Post 86 959(c)(3) Audit Trail Report (tax year 2018 and later)
Summary of Year End Tax Attributes (tax year 2018 and later)
Deemed Paid Tax by Payor (tax year 2018 and later)
Consolidated Summary of Year End Tax Attributes in USD (2018)
Reclassification section of the E&P by Source Code - After Dividend Look Through Report
Subpart F reclassifications don't populate amounts in mid- or lower-tier nested divisional consolidations. The reclassification populates in the legal entity divisional consolidation and division binders.
Subpart F reclassification may be incorrect for Section 952(c)(1)(A) reduction and Section 954(b)(4) line items when the entity is full inclusion. The reclassifications populate in the legal entity divisional consolidation binder as expected.
For tax year 2019 and later,
when an entity receives deemed paid taxes from a lower-tier
the Post 86 Income Tax Pool Report and the detailed report may not be as expected. As a workaround, use the Post 86 Tax Reconciliation Report.
Detailed lines may be missing on the
Section 954(b)(3) De Minimis/Full Inclusion Report
. The total lines (net sales, total cost of goods sold, gross profit, total gross income, total income, total deductions, total taxes and after tax E&P) and the computation of the De Minimis/Full Inclusion tests are as expected.