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Deductions

Itemized deduction recoveries

Per Publication 17 - Your Federal Income Tax, if you recover amounts that you deducted in an earlier year on Schedule A (Form 1040), include the full amount of the recovery in your income in the year you receive it. For more information on recoveries, refer to Publication 525 - Taxable and Nontaxable Income.
Report itemized deduction recoveries for state and local income tax returns on Form 1040, Schedule 1, line 10. For all other recoveries, report them on Form 1040, Schedule 1, line 8.
note
The application will figure the taxable amount of state and local refunds using the Tax Refund Worksheets in
Forms View
, then the
Wrk1
 folder.
Only your itemized deductions that are more than your standard deduction are subject to the recovery rule (unless you need to itemize your deductions). If your total deductions on the earlier year return weren't more than your income for that year, include in your income this year the lesser of:
  • Your recoveries.
  • The amount by which your itemized deductions exceeded the standard deduction.

This article applies to:

  • PRODUCT: UltraTax CS
  • Return type: 1040 Individual

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