Error on Sch B Worksheet

Please post back with the solution.  My return with this situation is going on extension.

By deduction, yes.  Would have been nice to see it in the Question, wouldn't it?

To "clarify" - I emailed Lacerte on Thurs 3-24 at approx 3pm PST.  As of now (Sun March 3-27 @ 7:45pm PST) there has still been no reply.  In my original email I provided Lacerte with both the return in question and a PDF of what I believe the correct Schedule B Worksheet prior gift tax recomputation should be.  My facts: prior use of specific exemption in 12/76 results in a reduction to the current credit of $6,000.  T/P made various taxable gifts between 1976 thru 1999 with an cumulative total $1.9 million.  When the last gift was made in 1999 the credit had an exemption equivalent of $650,000.  IRS instructions specifically state that the recomputation is to take into account the specific exemption amount as of the year of the original taxable gift.  My T/P, using the program as written, has a balance due of $6K for the use of the specific exemption back in 1976 as well as a small tax on current gifts when, in fact, my taxpayer should have a credit remaining of $116,500.  (The program just "maxed out" the use of the current credit of $330,800 as of 1999 even though the taxable gifts at that time were based on a $650K exemption not the current $1M.)

Tried to actually telephone Lacerte tech support and got someone on the phone that (a) did not know what gift tax was, and (b) was reading me the Lacerte program instructions rather than actually addressing the issue.  Hence, my original email.  I waited a reasonable two days for a response and failing any response from Lacerte I posted my issue (in brief) in this forum.  Certainly, if and when, I actually get a response from Lacerte I will post same here.  (Two years ago I had a technical issue with California AMT on a Trust and the response finally came 5, yes FIVE weeks later, saying - we know, we are not fixing it.)

Thanks for the clarification and heads up about the issue.  Accountant Man's point, with which I concur, is that your original post did not mention Gift Tax Return Form 709 anywhere.  That would be useful info for anyone trying to help answer questions or prepare a gift tax return.

Lacerte responded to my email of March 24th (Thurs) regarding the error in computing the Gift Tax, Sch B recomputation: (a) admitting the software is incorrect both as to addressing the utilization of the old law specific exemption and computing prior usage of current credit for taxable gifts in prior years with lower exemptions amounts, (b) they will fix it "sometime later this week", and (c) I should refer to the forum for answers to my questions.

Either akw a) does not read our responses, b) does not care about our responses, or c) thinks he is in a gift tax forum and doesn't need to answer our responses.

In any case, I cannot help him since I do not do enough 709s to see this issue, let alone understand it.

I agree with your a,b,c.

Basically akw is saying there is a glitch in the program if TP made giftsbefore 1/1/77 under the "old" specific exemption regime.

Sch B Worksheet after release today (3-31-11):  The specific exemption utilization issue is solved BUT the Worksheet still NOT CORRECT.  IRS instructions state that the amount in Column D should NOT exceed the applicable exclusion amount as of the year of the gift.  (e.g. in 1999 the applicable exclusion = $650,000; the worksheet still uses the current gift tax exclusion of $1 million in recomputing the gift; end result is that $350,000 of current year gifts are taxed when they shouldn't be).  Someone marked the issue as solved and its only partly fixed.

As for comments: (a) I read thru everything in the forum after trying to get Lacerte to help by phone, (b) if I didn't care about responses or others risks to filing a bad return I wouldn't have responded in as much detail (c) I assumed that if I posted a question when in gift tax it would flag as gift tax.

You will note that in my posting I actually did "take out my pencil" and followed the instructions to prepare Schedule B worksheet recomputation.  In my facts, with both a prior specific exemption AND taxable gifts when the exemption was less than the current $1 million the program did NOT correctly compute the prior utilization of the credit.  There is a "phantom" tax on this return.  Lacerte indicated they are aware of the error and "are fixing it" sometime.  The program will correclty compute the prior utilization if you have fully used the current $1 million exemption and did NOT have specific exemption usage.

Ok, understood.  My return with that situation was correct.  the one with the specific exemption is going on extension.

Your client is more understanding than mine.  My only reason for the original post was to get Lacerte to fix the program or send out an alert that it was not working correctly for all returns just in case some overworked, stressed accountant did not check the actual calcs in the software.  Still no response from Lacerte as to when a fix will be out.

Another release came out and it is still not fixed. This is really annoying. Is anyone as frustrated by Lacerte's lack of response as I am?