LACERTE WRONG ON CA CANCELLATION OF DEBT
SCREEN 14.1 and SCREEN 62 - Cancellation of Debt Income and exclusion for principal residence portion
BEWARE - In my opinion there is a major issue in the Lacerte program in this area. I have contacted the tech department. My program, and the program of three of my fellow accountants, calculate and recalculate the input in this area differently each time you open and close the program, and when you make an alteration or addition of information to Screen 14.1 and Screen 62 (the Form 982), sometimes it disappears. IT'S DOING IT WRONG, and the F-1 input memos for the line input on these screens are wrong, too.
In California, there is no exclusion from income for principal residence Cancellation of Debt like there is in the Federal, but the program is often not including that income on the California 540. Then, when you close the program and open it again, it sometimes DOES include the income (which is usually correct unless another Sec 108 exclusion is appropriate), but when you alter the data on Screen 14.1, even a minor alteration, the income disappears. Also, if you use the Ctrl-E on the Cancellation of Debt line on Screen 14.1 and list multiple amounts, it handles it differently than if you just put a single amount right on the Cancellation of Debt line as a whole total amount. Also, on Screen 14.1 the line "Qualified principal residence exclusion" does not carry to the Form 982 - you have to re-input it in Screen 62, as well as complete the lower portion of Screen 62 with the Tax Attribute Excluded amount. DO NOT BELIEVE THE LACERTE RESULT UNTIL THEY FIX THIS