How can I enable distributed transactions for a linked server?
In addition to setting Local DTC Properties, you need to open the firewall on both machines to allow program Distributed Transaction Coordinator to go thru.

 

When testing T-SQL in Query Editor Window, make sure to turn on XACT_ABORT as suggested by Microsoft.


  XACT_ABORT must be set ON for data modification statements in an implicit or explicit transaction against most OLE DB providers, including SQL Server. The only case where this option is not required is if the provider supports nested transactions.


In my case, for the Local DTC Properties, I only need these: