Fix MO capital loss limitation #7303
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Closes #7290 Co-Authored-By: Claude Opus 4.5 <noreply@anthropic.com>
Codecov Report✅ All modified and coverable lines are covered by tests. Additional details and impacted files@@ Coverage Diff @@
## main #7303 +/- ##
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+ Coverage 72.72% 100.00% +27.27%
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Files 3757 1 -3756
Lines 54115 29 -54086
Branches 267 0 -267
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- Hits 39353 29 -39324
+ Misses 14742 0 -14742
+ Partials 20 0 -20
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The where() function evaluates both branches before selecting, which causes divide-by-zero warnings when unit_gross_income is 0. Using np.divide with a mask prevents evaluation of the division when the mask is False. Co-Authored-By: Claude Opus 4.5 <noreply@anthropic.com>
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Related: PolicyEngine/policyengine-taxsim#627 (MO joint 2024 capital loss discrepancy) |
The np.divide out parameter already serves as the default value, so no outer where() is needed. Just pass the default allocation as the out. Co-Authored-By: Claude Opus 4.5 <noreply@anthropic.com>
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Closes #7290
Summary
Missouri income tax now correctly handles capital loss deductions for joint filers where one spouse has no income.
Changes
mo_adjusted_gross_incometo allocate above-the-line deductions proportionally by gross income rather than equally between spousesRoot Cause
The previous implementation split above-the-line deductions equally between spouses. When one spouse had no income, their share of the deduction was "lost" because they couldn't use it (the
max_(0, fed_agi)would clip it). This caused MO AGI to be higher than federal AGI for joint filers with capital losses and unequal income.Test
MO joint with capital losses uses federal $3,000 limit (issue 7290)to verify:Related Issues
irs_gross_incomewith ALD allocation rather than a separate income_sources parameter