Update to Error in Tax Calculation in 2018 Schedule D Tax Worksheet (Form 1041)

 

The 2018 Schedule D Tax Worksheet in the Instructions for Schedule D (Form 1041) contained an error that affected certain taxpayers who had 28% rate gain or unrecaptured section 1250 gain.  On May 16, 2019, the IRS posted a corrected version of the worksheet, which can be found at the end of the updated instructions at the link above.  For more information on the error and how it was corrected, see Error in Tax Calculation in Schedule D (Form 1041) Tax Worksheet.

Note that most taxpayers filing Schedule D do not have these types of gains and do not use the Schedule D Tax Worksheet to figure their regular tax and are unaffected.

If you are affected by this, you don’t need to file an amended return or call the IRS.  The IRS is reviewing all potentially impacted filed returns, including those filed before May 16, 2019, and will send correction notices to any affected taxpayers.  Taxpayers who overpaid their tax due to the error will receive refunds.  If you filed an amended return because you opted to recalculate your regular tax using the new worksheet to see if it changed, the IRS is currently processing those amended returns.