Lines 9 and 10 — Application of Itemized Deduction Limitations on
Deductions Properly Allocable to Investment Income Worksheet—
continued
Keep for Your Records
Part IV — Reconciliation of Schedule A Deductions to Form 8960, lines 9 and 10 (Individuals Only)
(B)
IF Part III, line 8 is less
than Part III, line 4,
THEN divide line 8 by
(C)
line 4 AND enter the
Multiply the individual
amount in column (B).
amounts in column
IF the amounts
(A) by the amount in
reported on Part III,
column (B). Enter
lines 4 and 8 are
these amounts in the
(A)
equal, THEN enter
appropriate location
Reenter the amounts and descriptions from Part III, lines 1 – 3.
1.00 in column (B).
on lines 9 and 10.
Miscellaneous Itemized Deductions properly allocable to
investment income:
Description
Line
Amount
1.
(a)
×
=
(b)
×
=
2. State, local, and foreign income taxes . . . . . . . . . . . . . . . .
×
=
Itemized Deductions Subject to Section 68 included on Line
3 of Part III:
3.
(a)
×
=
(b)
×
=
would otherwise have been allowable but
4. The amount of the deduction
Line 10—Additional Modifications
for the fact that the terminating trust or
allowable under section 171(a)(1) for the
Use line 10 to report additional deductions
estate had negative net investment
amortizable bond premium on a taxable
and modifications to net investment
income upon termination. This amount
bond. Do not include the amount of bond
income that are not otherwise reflected in
may be some or all of the amount reported
premium amortization that is used to offset
lines 1-9. Enter amounts on line 10 as
on Schedule K-1 (Form 1041), line 11a.
interest income under section 171(e) on
positive numbers.
See Regulations section 1.1411-4(g)(4)
your Schedule B (Form 1040A or 1040),
(iii),
Interest and Ordinary Dividends. This
Note. Enter the amount on line 10 after
amount of bond premium amortization is
Certain amounts reported on
the application of section 67 or 68. See
already taken into account in computing
Schedule A (Form 1040), line 28:
Lines 9 and 10 — Application of Itemized
interest income on Form 8960, line 1.
1. The amount of the deduction
Deduction Limitations on Deductions
allowed to an annuitant for the annuitant's
Properly Allocable to Investment Income
If you are a partner in an Electing Large
last tax year under section 72(b)(3),
Worksheet, earlier, for assistance in
Partnership and receive a Schedule K-1
provided the income from the annuity (had
figuring the amount to report on line 10.
(Form 1065-B), Partner's Share of Income
the annuitant lived to receive such
(Loss) From an Electing Large
income) would have been included in net
You may use line 10 to report properly
Partnership, and box 2 contains a loss,
investment income and not otherwise
allocable deductions such as:
report this loss on line 10,
excluded as a distribution from a qualified
The penalty paid for an early withdrawal
To the extent these items are properly
plan,
of savings under section 62(a)(9) (Form
allocable to net investment income. See
1040, line 30),
2. Deduction for payment of amounts
Reasonable method
allocations, earlier,
under a claim of right if over $3,000, to the
The amount treated as an ordinary loss
1. All ordinary and necessary
extent that such repayments relate to
by a holder of a contingent payment debt
expenses paid or incurred during the tax
items of income included in net investment
instrument under Regulations section
year to determine, collect, or obtain a
income in a preceding year that began
1.1275-4(b) or an inflation-indexed debt
refund of any tax owed, but only to the
after 2012. See Pub. 525, Taxable and
instrument under Regulations section
extent the expenses are allocable to net
Nontaxable Income, for details,
1.1275-7(f)(1),
investment income (Schedule A (Form
Net negative periodic payments paid on
3. The amount of the deduction for
1040), line 22), and
a notional principal contract (NPC) that is
estate taxes allowed by section 691(c)
2. Amounts paid or incurred by the
referenced to property (including an index)
that is allocable to net investment income,
fiduciary of an estate or trust on account of
that produces (or would produce if the
except to the extent that the section 691(c)
administration expenses, including
property were to produce income) interest,
deduction is taken into account in
fiduciaries' fees and expenses of litigation,
dividends, royalties, or rents,
computing net gain on line 5(a) (or line 7 if
which are ordinary and necessary in
Excess deductions allocated to a
applicable), and
connection with the performance of the
beneficiary upon the termination of an
duties of administration.
estate or trust under section 642(h)(2) that
Instructions for Form 8960 (2015)
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