Allocation of Deductions for Tax-exempt Income worksheet
The Allocation of Deductions for Tax-exempt Income worksheet is 1 of 4 worksheets that show how expenses are calculated. These worksheets are available in the
Expenses
folder in Forms view.To view this worksheet, right-click and select
Switch to Form
, then select the Expenses
folder.note
The other 3 worksheets are:
- Allocation of Expenses by Income Type - Tax Basis
- Allocation of Expenses by Income Type — Accounting Income Basis.
- Partnership / S Corporation Worksheet
- The form instructions indicate that a reasonable portion of expenses can be allocated against tax-exempt income.
- This worksheet shows the expenses entered for the return (direct and indirect) and the calculation of indirect expenses to tax-exempt income.
- The Income column amounts are reported on the Allocation of Expenses by Income Type – Accounting Income Basis worksheet.
- The total column amounts are reported on the Allocation of Expenses by Income Type – Tax Basis worksheet.
- Capital gains are included in the allocation of expenses to the extent they're allocated to beneficiaries. UseNet capital gains for tax-exempt income allocation (Force)on theAllocatescreen in theAllocationsfolder to include a different amount.
- By default, tax expense isn't indirectly allocated to tax-exempt income. UseAllocate indirect tax expense to all income typeson theAllocatescreen in theAllocationfolder to change the calculation.
