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Part 3. Submission Processing

Chapter 11. Returns and Documents Analysis

Section 3. Individual Income Tax Returns (Cont. 6)

3.11.3  Individual Income Tax Returns (Cont. 6)

3.11.3.28  (01-01-2008)
Form 4137—Social Security Tax on Unreported Tip Income

  1. The instructions provided in this subsection of the manual are for editing Form 4137. These instructions include:

    • General editing and perfecting procedures

    • Sequencing and combining multiple Forms 4137

    • Perfecting the Taxpayer Identification Number (TIN)

  2. The following lines on Form 4137 are T-Lines and T-COMPUTE lines:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡     		≡ ≡ ≡ ≡

3.11.3.28.1  (01-01-2008)
Form 4137, General Procedures

  1. Only two Forms 4137 can be processed per return. One Form 4137 for each of:

    • The primary taxpayer

    • The secondary taxpayer

  2. Edit the Sequence Code in the upper-right margin if not preprinted.

  3. Enter Sequence Code "24" if it is not already preprinted when there is only one processable Form 4137 attached to the return.

  4. When there are two processable Forms 4137 attached to the return, and one is for the primary taxpayer and one is for the secondary taxpayer:

    1. Enter Sequence Code "24" , if it is not already preprinted, for the primary taxpayer.

    2. Edit Sequence Code "25" for the secondary taxpayer.

  5. Combine multiple Forms 4137 when the taxpayer submits more than one Form 4137 for any one taxpayer. Delete those forms not used.

  6. If one Form 4137 was submitted for two taxpayers take one of the following actions:

    1. Allocate the proper amounts to two dummy Forms 4137. "X" the Form 4137 with the combined taxpayer amounts. Delete those forms not used.

    2. Correspond when the proper allocation cannot be determined.

3.11.3.28.2  (01-01-2008)
Taxpayer Identification Number (TIN)

  1. Edit the TIN of the taxpayer filing Form 4137 from the caption area of Form 1040 when the TIN is missing, illegible, or other than nine digits. If the TIN is not present in the caption, search Form(s) W–2 and other attachments for the missing TIN.

    Note:

    Also edit the missing TIN to the caption.

  2. Use the caption to determine the correct TIN when there are two TINs but only one name on Form 4137. Circle the TIN which does not match the taxpayer name.

3.11.3.28.3  (01-01-2008)
Line 8—Total Social Security Wages and Tips

  1. Compute and enter line 8 when it is blank and the taxpayer has Form W–2 wages and tips subject to Social Security Tax withholding.

    Note:

    Only enter the amount from the "Social Security Wages" box, "Social Security Tips" box, or "Wages, Tips, and Other Compensation" box if there is also an amount in the box for "Social Security Tax Withheld" .

  2. Add the Form 4137 taxpayer's Form W–2 wages and tips subject to Social Security Tax withholding when the amount on line 7 is more than $97,500.

    If the Then
    Total of all wages and tips on Form(s) W–2 is $97,500 or less, Edit the total income amount from Form(s) W–2 to line 8.
    Taxpayer has no Form W–2 income, "X" line 8.

3.11.3.29  (01-01-2008)
Form 4684—Casualties and Thefts

  1. The instructions provided in this subsection of the manual are for editing Form 4684. These instructions include the general editing and perfecting procedures for Forms 4684.

  2. The following lines on Form 4684 are T-Lines and T-COMPUTE lines:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

3.11.3.29.1  (01-01-2008)
Form 4684, Editing Procedures

  1. Enter Sequence Code "26" in the upper-right margin, if not preprinted.

  2. Only one Form 4684 is processable:

    1. Process the first Form 4684 with an entry on line 16.

    2. Delete all forms not to be transcribed.

  3. Compute and enter line 16 only when both of the following conditions are present:

    • Line 16 is blank, and

    • A significant entry is present on line 13.

  4. "X" Form 4684 when either of the following conditions is present:

    • No significant entry is present or edited on line 16

    • Only page 2 of Form 4684 is attached.

3.11.3.30  (01-01-2008)
Form 4797—Sale(s) of Business Property

  1. The instructions provided in this subsection of the manual are for editing Form 4797. These instructions include the editing and perfecting procedures for Forms 4797.

  2. The following lines on Form 4797 are T-Lines and T-COMPUTE lines:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

3.11.3.30.1  (01-01-2008)
Form 4797, Editing Procedures

  1. Enter Sequence Code "27" in the upper-right margin if not preprinted.

  2. Only one Form 4797 is processable;

    1. Combine all related T-Line amounts and enter the total on one form.

    2. "X" all forms not to be transcribed.

  3. Examine Part I and Part II columns (g), and Part III line 24, for gains from sales of animals. If any amounts are present:

    1. Compute and enter the total in the bottom center margin below Part II. (See Figure 3.11.3–127)

    2. Use only positive amounts when computing the gain on the sale of animals.

      Figure 3.11.3-127

      This image is too large to be displayed in the current screen. Please click the link to view the image.

  4. If line 9(g) is blank, take one of the following actions:

    1. If line 8(g) has an entry, subtract the line 8(g) amount from line 7(g). If the result is a positive amount enter the amount.

    2. If line 8(g) is not present, enter the positive amount from line 7(g).

  5. "X" the Form 4797 when there is no significant amount on or edited to any of the T-Lines.

3.11.3.31  (01-01-2008)
Form 4972—Tax on Lump-Sum Distributions

  1. The instructions provided in this subsection of the manual are for editing Form 4972.

  2. The following lines on Form 4972 are T-Lines and T-COMPUTE lines:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡     		≡ ≡ ≡ ≡ ≡ ≡

3.11.3.31.1  (01-01-2008)
Form 4972, Editing Procedures

  1. Enter Sequence Code "28" in the upper-right margin if not preprinted.

  2. Only one Form 4972 can be processed. Combine multiple Forms 4972 onto the first Form 4972 containing "Yes" entries in Part I. "X" any Forms 4972 not used.

  3. "X" Form 4972 when blank or the only entries present are in Part I.

  4. Edit RPC "G" when both of the following conditions are present:

    1. There is a significant amount on lines 6 or 8 of Form 4972 and

    2. Withholding is present on line 64 of Form 1040.

  5. Mark the "No" box on line 5b when the taxpayer has not answered the question on line 5b.

3.11.3.32  (01-01-2008)
Form 5329—Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts

  1. The instructions provided in this subsection of the manual are for editing Form 5329. These instructions include:

    • General editing and perfecting procedures

    • Coding the spousal indicator

    • Perfecting the name line

    • Editing the Loose Form 5329 Indicator Code

    • Editing the IRA Condition Code

  2. The following lines on the Form 5329 are T-Lines and T-COMPUTE lines:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡

3.11.3.32.1  (01-01-2008)
Form 5329, Editing Procedures

  1. Only two Forms 5329 can be processed per return. One Form 5329 for each of:

    • The primary taxpayer

    • The secondary taxpayer

  2. Edit the Sequence Code in the upper-right margin if not preprinted.

  3. Enter Sequence Code "29" if it is not already preprinted when there is only one processable Form 5329 attached to the return.

  4. When there are two processable Forms 5329 attached to the return, and one is for the primary taxpayer and one is for the secondary taxpayer:

    1. Enter Sequence Code "29" , if it is not already preprinted, for the primary taxpayer.

    2. Edit Sequence Code "30" for the secondary taxpayer.

  5. Combine multiple Forms 5329 when the taxpayer submits more than one Form 5329 for any one taxpayer. Delete those forms not used.

  6. If line 60, Form 1040 is blank and Form 5329 is present with only entity information present, "X" the Form 5329.

  7. If there are no significant entries on any T-lines, but amounts are present in any of Parts I through VIII, do not "X" Form 5329 unless it is attached to a Form 1040A. (See Figure 3.11.3–128.)

  8. Perfect Form(s) 5329 when amounts are present in Parts I through VIII.

3.11.3.32.1.1  (01-01-2008)
IRA Condition Codes

  1. Use the chart below to determine the correct IRA Condition Code editing. Edit the code in the lower-right margin of page 2 of Form 5329. If page 2 is not present, edit code on page 1 in the lower-right margin of page 1, Form 5329.

    If Then
    Reasonable cause for failure to pay the penalty is established (see the examples of reasonable cause criteria in Exhibit 3.11.3–8), Edit IRA Condition Code "30" .
    Reasonable cause for failure to file Form 5329 is established, Dummy Form 5329 and edit IRA Condition Code "33" .
    A waiver, or a request for waiver, of tax on excess accumulation on a qualified retirement plan is present for an amount on line 53 of Form 5329, Edit IRA Condition Code "35" .
    The Form 5329 is for a deceased taxpayer, Edit IRA Condition Code "37" .

3.11.3.32.1.2  (01-01-2008)
Name Line (To perfect Form 5329)

  1. Enter or perfect the name line so that only one taxpayer's name is present. (See Figure 3.11.3–128.)

    1. Search the return and attachments, if necessary, to determine the correct name.

    2. Correspond for the recipient's name when there are two names in the caption and the correct taxpayer name cannot be determined.

  2. When Form 5329 is filed for a deceased taxpayer edit "DECD" after the taxpayer's last name.

    Note:

    Enter IRA Condition Code "37" for all deceased taxpayers.

3.11.3.32.1.3  (01-01-2008)
Spousal Indicator (To perfect Form 5329)

  1. Edit the spousal indicator on joint returns only.

  2. Code the indicator to the left of the form title.

  3. The code indicates the taxpayer for whom the Form 5329 is filed. Code as follows:

    1. Enter a "1" for the primary taxpayer.

    2. Enter a "2" for the secondary taxpayer. (See Figure 3.11.3–128.)

    Figure 3.11.3-128
    This image is too large to be displayed in the current screen. Please click the link to view the image.

3.11.3.32.1.4  (01-01-2008)
Lines 17, 25, 33, 41, 49 and 53—Tax Due (To perfect Form 5329)

  1. Use the chart below to perfect entries on Form 5329 when lines 17, 25, 33, 41, 49 and 53 are all blank and there is an entry on line 60 of Form 1040:

    If on line 60, Form 1040 the taxpayer has written Then
    "Tax on Excess Contributions to Traditional IRAs," Enter the line 60 amount on line 17 of Form 5329.
    "Tax on Excess Contributions to ROTH IRAs" Enter the line 60 amount on line 25 of Form 5329.
    "Tax on Excess Contributions to Education (Ed) IRAs" (Coverdell ESA's) Enter the line 60 amount on line 33 of Form 5329.
    "Tax on Excess Contributions to Medical Savings Accounts" (Archer MSA) Enter the line 60 amount on line 41 of Form 5329.
    "Tax on Excess Contributions to Health Savings Accounts (HSA)" Enter the line 60 amount on line 49 of Form 5329.
    "Tax on Excess Accumulation in Individual Retirement Plans" Enter the line 60 amount on line 53 of Form 5329.

3.11.3.32.2  (01-01-2008)
Loose Form 5329

  1. Taxpayers who are not required to file a Form 1040 may still be required to file Form 5329. They are directed to file only Form 5329. Returns which are processed only to support the Form 5329 are posted to the Individual Retirement Account File or "IRAF" .

  2. "Loose" Forms 5329 may be received either alone or attached to a dummy Form 1040 prepared by another function. Dummy a Form 1040 when one is not attached. Verify that a dummy Form 1040 prepared by another function contains all of the necessary information.

  3. The items required on a dummy Form 1040 for processing "loose" Forms 5329 are the following:

    1. Tax period

    2. Name control

    3. P–TIN (and S–TIN on a joint return)

    4. FS "1" (or FS "2" on a joint return)

    5. RPC "L"

    6. Received date

    7. Preparer's data

    Note:

    Research when the taxpayer's name control, TIN, and filing status cannot be determined.

  4. Edit the Type Indicator Code "1" to the right of the address line of Form 5329.

    Note:

    Do not change the Type Indicator Code when "2" or "3" has already been entered by another function.

  5. Reject the Form 5329 to:

    1. Receipt and Control when a remittance is indicated, and there are entries on line 4 or 8, or line 53 only.

    2. The originator when the dummy Form 1040 is unprocessable.

  6. Do not"X" Form 5329 when the Form 1040 has "Dummy Return" or "Substitute for Return" written on it.

  7. Enter CCC "G" when there is an entry on line 4 in Part I and/or line 8 in Part II.

    Exception:

    Do not enter CCC "G" if the Type Indicator Code is "2" or "3" .

  8. Edit RPC "K" when the dummy Form 1040 is a statute protection case. Also refer to the instructions for statutory protection cases in IRM 3.11.3.58.2.

  9. Edit the appropriate IRA Condition Code when the taxpayer has met the reasonable cause criteria for late filing and/or late payment of tax on Form 5329. (See the examples of reasonable cause criteria in Exhibit 3.11.3–8.)

  10. Edit IRA Condition Code "32" when an amended Form 5329 with a dummy Form 1040 is being processed.

    Note:

    This instruction applies to amended Forms 5329—not to Forms 5329 attached to amended returns.

3.11.3.33  (01-01-2008)
Form 6198—At-Risk Limitations

  1. The instructions provided in this subsection of the manual are for editing Form 6198.

  2. The following lines on the Form 6198 are T-Lines and T-COMPUTE lines:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡

3.11.3.33.1  (01-01-2008)
Form 6198, Editing Instructions

  1. Enter Sequence Code "31" in the upper-right margin when not preprinted.

  2. "X" Form 6198 when the entry on line 5 is positive or zero.

  3. Only one Form 6198 can be processed. When more than one Form 6198 is present:

    1. Combine all related T-Lines from forms that result in a loss on line 5.

    2. Delete those forms not used.

    Exception:

    Do not combine Forms 6198 identified as "AMT," "ALT MIN TAX" , or "AMT CR" .

  4. Enter on line 20 the larger of line 10b or 19b when line 20 is blank. Do not enter a negative amount.

  5. Enter on line 21 the negative amount from line 5 when line 21 is blank.

3.11.3.34  (01-01-2008)
Form 6251—Alternative Minimum Tax

  1. The instructions provided in this subsection of the manual are for editing Form 6251.

  2. The following lines on the Form 6251 are T-Lines and T-COMPUTE lines:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡     		≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

3.11.3.34.1  (01-01-2008)
Form 6251, Editing Instructions

  1. Enter Sequence Code "32" in the upper-right margin when not preprinted.

  2. Do NOT "X" Form 6251 when there are no significant entries on T-Lines. .

  3. Only one Form 6251 can be processed. When multiple forms are present take the following actions:

    1. Combine all related T-Line amounts.

    2. "X" those forms not being used.

  4. Process Form 6251 using normal procedures when "For Information Only" or "does not apply" , etc. is written on the form.

3.11.3.35  (01-01-2008)
Form 8615—Tax for Children Under Age 18 with Investment Income of More than $1,700

  1. The instructions provided in this subsection of the manual are for editing Form 8615. These instructions include:

    • General editing and perfecting procedures

    • Perfecting the parent's name line, TIN, and filing status

  2. The following lines on the Form 8615 are T-Lines and T-COMPUTE lines:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡     		≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

3.11.3.35.1  (01-01-2008)
Form 8615, General Instructions

  1. Enter Sequence Code "33" in the upper-right margin when not preprinted.

  2. Only one Form 8615 can be processed. When multiple Forms 8615 are present:

    1. Process the Form 8615 for the taxpayer identified on the Form 1040.

    2. Delete those forms not used.

  3. Form 8615 can only be processed with a dependent child's return. "X" Form 8615 when Form 8615 is attached to a parent's return. Also "X" one of the following lines:

    • Line 63– Form 1040

    • Line 37– Form 1040A

  4. "X" Form 8615 when the amount on line 1 is $1,700 or less.

  5. "X" Form 8615 when Line 3 is computed to be negative or zero.

  6. Edit "Minor" as a suffix to the child's name in the caption. (See Figure 3.11.3–129.)

  7. Edit the additional information line—and require documentary evidence from the person signing for the child—only as required in the instructions for minor children's returns in IRM 3.11.3.7.1.3.2.

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  8. Edit CCC "Y" and an Action Trail when the taxpayer has not computed the tax on Form 8615.

    Figure 3.11.3-129

    This image is too large to be displayed in the current screen. Please click the link to view the image.

3.11.3.35.2  (01-01-2008)
Parent's Name Line, TIN, and Filing Status

  1. Edit the parent's Name Control to Line A, if not already present.

  2. Enter the parent's name control from the signature line when both of the following are present:

    • The parent's name line is blank on Form 8615, and

    • The parent's name is present and legible on Form 1040/A.

  3. Correspond when both of the following conditions are present:

    1. The parent's name control cannot be determined, and

    2. The parent's TIN is more or fewer than nine numbers, illegible, or missing.

  4. Perfect the parent's TIN as follows when the parent's name control is present:

    1. Circle the parent's TIN when it is illegible or other than nine digits.

    2. Circle all but the first TIN when multiple TINs are present.

    3. Take no action when the TIN is missing.

3.11.3.35.3  (01-01-2008)
Line 1—Child's Investment Income

  1. Use the table below to determine the correct editing when line 1 of Form 8615 is blank.

    If Form 8615 is attached to Then
    Form 1040A, Add lines 8a and 9a from page 1 of Form 1040A and enter the total on line 1.
    Form 1040, Do not perfect line 1.

  2. "X" Form 8615 when the amount on line 1 is $1,700 or less.

3.11.3.35.4  (01-01-2008)
Line 6—Parent's Taxable Income

  1. "X" line 6 when it is a negative amount.

  2. Correspond when line 6 is blank, and line 5 has a significant entry.

    Exception:

    Do not correspond when the taxpayer indicates that s/he has computed the tax at the maximum rate.

3.11.3.35.5  (01-01-2008)
Line 18—Total Tax

  1. Enter the larger of line 16 or 17 when line 18 is blank.

3.11.3.36  (01-01-2008)
Form 4835—Farm Rental Income and Expenses

  1. The instructions provided in this subsection of the manual are for editing Form 4835.

  2. The following lines on the Form 4835 are T-Lines and T-COMPUTE lines:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡     		≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

3.11.3.36.1  (01-01-2008)
Form 4835, Editing Procedures

  1. Enter Sequence Code "37" in the upper-right margin when it is not preprinted.

  2. Only one Form 4835 can be processed. When multiple Forms 4835 are present:

    1. Combine all related T-Line amounts.

    2. "X" those forms not being transcribed.

  3. Take one of the following actions when line 40 of Schedule E is blank:

    1. Edit the amount from Form 4835, line 32 (if a gain), to line 40, Schedule E.

    2. Edit the amount from Form 4835, line 33c (if a loss), to line 40, Schedule E unless the taxpayer notates "PAL" . (See Figure 3.11.3–130.)

    3. If line 33c on Form 4835 is blank, edit the loss from line 32, Form 4835, to line 40, Schedule E, unless the taxpayer notates "PAL."

      Note:

      Combine Form 4835 totals when perfecting Schedule E.

  4. Edit a positive amount from line 7 of Form 4835 to line 42 of Schedule E when line 42 of Schedule E is blank. (See Figure 3.11.3–130.)

    Note:

    Combine Form 4835 totals when perfecting Schedule E.

    Figure 3.11.3-130

    This image is too large to be displayed in the current screen. Please click the link to view the image.

3.11.3.37  (01-01-2008)
Form 8839—Qualified Adoption Expenses

  1. The instructions provided in this subsection of the manual are for editing Form 8839.

  2. The following lines on the Form 8839 are T-Lines and T-COMPUTE lines:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡

3.11.3.37.1  (01-01-2008)
Form 8839, Editing Procedures

  1. Enter Sequence Code "38" in the upper-right margin when it is not preprinted.

  2. The taxpayer is instructed to file as many Forms 8839 as needed to report the number of children that s/he adopted or unsuccessfully attempted to adopt. However, only one Form 8839 can be processed. Select the Form 8839 for processing in the following priority:

    1. Process the first Form 8839 with an entry on line 7, or

    2. Process the first Form 8839 when there are no Forms 8839 with an entry on line 7.