1040-US: Calculation of Form 4952, line 5

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Question

Sometimes the client's investment expenses are reported in total on Form 4952, line 5, sometimes the amount is reduced, and often there is no amount reported. How does the amount of investment expenses reported on Form 4952, line 5 calculate?

Answer

Investment expenses are allowed deductions, other than interest expense, directly connected with the production of investment income. Bond premium amortization from Schedule A, line 16, combines with royalty expenses for purposes of calculating line 5. You can change the calculated amount on Screen 4952 using the Investment expenses (Force) field, if applicable.

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