Asset depreciation issues for 1040 state returns

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Effective May 3rd, the 2017 version of UltraTax CS requires multi-factor authentication (MFA) to access the electronic filing transmission feature in CS Connect.

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If you are entering asset information for a 1040 state or city return in the asset module, note that some 1040 state and city returns have depreciation issues of which you should be aware. Click one of the following states or cities to view the depreciation issues.

UltraTax CS uses data entered in the AL column to calculate depreciation following Alabama law. The AL column must be completed to prepare an Alabama return.

UltraTax CS uses data entered in the AZ column to calculate depreciation following Arizona law. The AZ column must be completed to prepare an Arizona return.

Note: Enter the federal amount (from the Tax column) of section 179 in the AZ column.

UltraTax CS uses data entered in the AR column to calculate depreciation following Arkansas law. The AR column must be completed to prepare an Arkansas return.

UltraTax CS uses data entered in the CA column to calculate depreciation following California law. The California depreciation adjustment that transfers to California Schedule CA is the difference between federal Tax amounts and CA amounts. Thus, the CA column must be completed to report the California adjustment on Schedule CA.

Data entered in the CAAMT column is used to calculate the adjustment, which transfers to California Schedule P. If data is not entered in the CAAMT column, the AMT depreciation adjustment for Schedule P is based on the amounts entered in the federal AMT column.

Colorado uses federal depreciation amounts for calculation purposes. Data entered in the CO column is not used to calculate amounts for the Colorado return.

Connecticut uses federal depreciation amounts for calculation purposes. Data entered in the CT column is not used to calculate amounts for the Connecticut return.

Delaware uses federal depreciation amounts for calculation purposes. Data entered in the DE column is not used to calculate amounts for the Delaware return.

UltraTax CS uses data entered in the DC column to calculate depreciation following District of Columbia law. The DC column must be completed to prepare a District of Columbia return.

UltraTax CS uses data entered in the GA column to calculate depreciation following Georgia law. The GA column must be completed to prepare a Georgia return.

UltraTax CS uses data entered in the HI column to calculate depreciation following Hawaii law. The HI column must be completed to prepare a Hawaii return.

UltraTax CS uses data entered in the ID column to calculate depreciation following Idaho law. The ID column must be completed to prepare an Idaho return.

Illinois uses federal depreciation amounts for calculation purposes. Depreciation adjustments, which are required due to the state's noncompliance with section 168(k) bonus depreciation, are calculated from amounts in the federal Tax column. Data entered in the IL column is not used to calculate amounts for the Illinois return.

UltraTax CS uses data entered in the IN column to calculate depreciation following Indiana law. The IN column must be completed to prepare an Indiana return.

UltraTax CS uses data entered in the IA column to calculate depreciation following Iowa law. The IA column must be completed to prepare an Iowa return.

Kansas uses federal depreciation amounts for calculation purposes. Data entered in the KS column is not used to calculate amounts for the Kansas return.

UltraTax CS uses data entered in the KY column to calculate depreciation following Kentucky law. The KY column must be completed to prepare a Kentucky return.

Louisiana uses federal depreciation amounts for calculation purposes. Data entered in the LA column is not used to calculate amounts for the Louisiana return.

UltraTax CS uses data entered in the ME column to calculate depreciation following Maine law. The ME column must be completed to prepare a Maine return.

UltraTax CS uses data entered in the MD column to calculate depreciation following Maryland law. The MD column must be completed to prepare a Maryland return.

UltraTax CS uses data entered in the MA column to calculate depreciation following Massachusetts law. The MA column must be completed to prepare a Massachusetts return.

Michigan uses federal depreciation amounts for calculation purposes. Data entered in the MI column is not used to calculate amounts for the Michigan return.

Minnesota uses federal depreciation amounts for calculation purposes. Depreciation adjustments, which are required due to the state's noncompliance with section 168(k) bonus depreciation and additional section 179 expense, are calculated from amounts in the federal Tax column. Data entered in the MN column should come from lines 4 of MN Schedules KPI and KS only. That data will be used to calculate the adjustment between federal section 179 and MN allowable section 179 expenses and a bonus add back/adjustment. Use of the MN column for any other purpose could result in an incorrect MN adjustment for section 179 addback.

UltraTax CS uses data entered in the MS column to calculate depreciation following Mississippi law. The MS column must be completed to prepare a Mississippi return.

UltraTax CS uses data entered in the MO column to calculate depreciation following Missouri law. The MO column must be completed to prepare a Missouri return.

Montana uses federal depreciation amounts for calculation purposes. Data entered in the MT column is not used to calculate amounts for the Montana return.

Nebraska uses federal depreciation amounts for calculation purposes. Data entered in the NE column is not used to calculate amounts for the Nebraska return.

UltraTax CS uses data entered in the NH column to calculate depreciation following New Hampshire law. The NH column must be completed to prepare a New Hampshire return.

UltraTax CS recalculates amounts for New Jersey business and farm income and rent, royalty, or copyright income using state depreciation information entered in the NJ column. The NJ column must be completed to prepare a New Jersey return.

New Mexico uses federal depreciation amounts for calculation purposes. Data entered in the NM column is not used to calculate amounts for the New Mexico return.

After depreciation is calculated, UltraTax CS transfers depreciation amounts for assets entered with an ACRS code in the Tax column, but not in the NY column, to the Form IT-399 and NYC-399 - Computation of allowable depreciation, In Service statement dialog in Screen NYAdj. If you do not enter depreciation amounts in the asset module, you must enter the information directly in Screen NYAdj in the Form IT-399 and NYC-399 - Computation of allowable depreciation, In Service statement dialog.

Note: New York does not accept "various" for the date acquired; therefore, do not enter 999999 in the Acquired field.

Asset dispositions - Form IT-399

UltraTax CS transfers post-1980 ACRS assets that were disposed of during the current year into the statement dialog attached to the Form IT-399 and NYC-399 - Computation of allowable depreciation, Sold field in Screen NYAdj.

Federal imports - Form IT-399

The table below contains information concerning the source of imported federal amounts. It refers to depreciation amounts from the asset module.

Field Federal source
Federal ACRS deduction Total current federal depreciation for assets with a "Tax" ACRS depreciation code and a "New York" non-ACRS depreciation code.
New York depreciation Total current state depreciation for assets with a "Tax" ACRS depreciation code and a "New York" non-ACRS depreciation code.

Data calculation and transfer - Form IT-398

After depreciation is calculated, UltraTax CS transfers depreciation amounts for non-NY Liberty Zone assets that were placed in service on or after 6/1/03 and entered with federal bonus depreciation in the Federal column, but not in the NY column, to the Form IT-398 Computation of allowable depreciation, In Service statement dialog in Screen NYAdj. If you do not enter depreciation amounts in the asset module, you must enter the information directly in Screen NYAdj in the Form IT-398 Computation of allowable depreciation, In Service statement dialog.

Note: New York does not accept "various" for the date acquired; therefore, do not enter 999999 in the Acquired field.

Asset dispositions - Form IT-398

UltraTax CS transfers assets that were placed in service on or after 6/1/03, included in calculations for federal, but not state, bonus depreciation, and disposed of during the current year, into the statement dialog attached to the Form IT-398 Computation of allowable depreciation, Sold field in Screen NYAdj.

Federal imports - Form IT-398

The table below contains information concerning the source of imported federal amounts. It refers to depreciation amounts from the asset module.

Field Federal Source
Federal depreciation deduction Total current federal depreciation for assets with federal bonus depreciation, but "New York" is not permitted bonus depreciation.
New York depreciation deduction Total current state depreciation for assets with "Tax" bonus depreciation, but "New York" is not permitted bonus depreciation.

Data calculation and transfer - Forms IT-212

UltraTax CS transfers assets to Screen NYCr for Form IT-212 Investment Credit. Click the Credit Information button in the Other tab of the asset module and enter information in the Credit Information dialog for the specified asset to indicate that the asset should transfer to Screen NYCr. If the asset is also disposed in the current year, information transfers to the Early dispositions of qualified property field in Screen NYCr. If you do not enter depreciation amounts in the asset module, you must enter the information directly in Screen NYCr in the Investments in qualified property or Early dispositions of qualified property statement dialogs.

Data calculation and transfer - Forms IT-201 and IT-203

New York requires that taxpayers who elect section 179 expense on a non-farm SUV add the section 179 expense back into income. UltraTax CS transfers the section 179 expense to the Form IT-398 Computation of allowable depreciation, In Service statement dialog in Screen NYAdj if the asset is marked as a New York SUV (over 6,000 pounds) within the asset module. To indicate the vehicle is an SUV subject to the add-back requirements, open the Vehicle > Listed tab for the specified asset, click the State Vehicle Information button, and mark the New York SUV (over 6,000 pounds) option. Do not adjust the section 179 expense amount under the NY column for the asset.

Upon disposal of a non-farm SUV for which the taxpayer elected section 179 expense, if the asset is marked as a New York SUV (over 6,000 pounds), the section 179 expense previously added back to New York income will transfer and result in a subtraction in the year of disposal. UltraTax CS transfers the section 179 expense to the statement dialog attached to the Form IT-398 Computation of allowable depreciation, Sold field in Screen NYAdj.

After depreciation is calculated, UltraTax CS transfers depreciation amounts for non-Liberty Zone and non-Resurgence Zone assets that have been depreciated according to section 168(k). Federal depreciation is transferred from the Tax column. New York City depreciation amounts transfer from the New York City column that determines allowable depreciation without regard to bonus depreciation. Transferred amounts appear in the statement dialog for the Form IT-399Z - Computation of allowable depreciation, Other or SUV field in Screen NYAdj. Only assets related to Schedule C or Schedule F transfer for New York City purposes.

Asset dispositions

If an asset has been disposed and the disposed asset was depreciated according to federal section 168(k), amounts will transfer to the statement dialog attached to the Form IT-399Z - Computation of allowable depreciation, Sold field in Screen NYAdj.

North Carolina uses federal depreciation amounts for calculation purposes. Depreciation adjustments, which are required due to the state's noncompliance with section 168(k) bonus depreciation, are calculated from amounts in the federal Tax column. Data entered in the NC column is not used to calculate amounts for the North Carolina return.

North Dakota uses federal depreciation amounts for calculation purposes. Data entered in the ND column is not used to calculate amounts for the North Dakota return.

Ohio uses federal depreciation amounts for calculation purposes. Depreciation adjustments, which are required due to the state's noncompliance with section 168(k) bonus depreciation and excess section 179 deductions, are calculated from amounts in the federal Tax column. Data entered in the OH column is not used to calculate amounts for the Ohio return.

Oklahoma uses federal depreciation amounts for calculation purposes. Data entered in the OK column is not used to calculate amounts for the Oklahoma return.

UltraTax CS uses data entered in the OR column to calculate depreciation following Oregon law. The OR column must be completed to prepare an Oregon return.

UltraTax CS uses data entered in the PA column to calculate depreciation following Pennsylvania law. The PA column must be completed to prepare a Pennsylvania return.

UltraTax CS uses data entered in the RI column to calculate depreciation following Rhode Island law. The RI column must be completed to prepare a Rhode Island return.

Data calculation and transfer

UltraTax CS transfers assets to Screen RICr for Form RI-3468, Computation of Investment Tax Credit. To mark an asset as qualifying for the Rhode Island Investment Tax Credit, open the asset in the asset module, click the Credit Information button in the Other tab, and mark the Qualified for investment tax credit checkbox in the RI Investment Credit tab.

UltraTax CS uses data entered in the SC column to calculate depreciation following South Carolina law. The SC column must be completed to prepare a South Carolina return.

Data calculation and transfer - Form FAE 170, Schedule J

After depreciation is calculated, UltraTax CS transfers asset depreciation amounts to the Federal depreciation statement dialog in Screen LLCDep. If you do not enter depreciation amounts in the asset module, you must enter the information directly in Screen LLCDep in the Federal depreciation statement dialog. Force fields are available in the statement dialog to edit amounts that transfer. Items manually entered in the statement dialog will not be overwritten or deleted when assets are entered in, and transfer from, the asset module. Transferred asset information appears as additional line items in the statement dialog.

Data calculation and transfer - Form FAE 170, Schedule G

After depreciation is calculated, UltraTax CS transfers asset depreciation amounts from the Book treatment column in the asset module to Screen LLCFNW based on the apportionment category entered in the asset module. In the absence of a Book treatment, the amounts transfer from the Tennessee treatment column in the asset module. Only assets with Tennessee selected in the Situs field transfer. Force fields are available in the statement dialogs to edit amounts that transfer. Items manually entered in the statement dialog will not be overwritten or deleted when assets are entered in, and transfer from, the asset module. Transferred asset information appears as additional line items in the statement dialog.

Data calculation and transfer - Form FAE 170, Schedule N

After depreciation is calculated, UltraTax CS transfers original cost amounts for assets from the Tennessee treatment column to the Original Cost fields in Screen LLCApp based on the apportionment category entered in the asset module. Assets with Tennessee selected in the Situs field transfer to the In Tennessee columns in the statement dialogs. Force fields are available in the statement dialogs to edit amounts that transfer to the In Tennessee columns. Items manually entered in the statement dialog will not be overwritten or deleted when assets are entered in, and transferred from, the asset module. Transferred asset information appears as additional line items in the statement dialog.

Utah uses federal depreciation amounts for calculation purposes. Data entered in the UT column is not used to calculate amounts for the Utah return.

UltraTax CS uses data entered in the VT column to calculate depreciation following Vermont law. The VT column must be completed to prepare a Vermont return.

UltraTax CS uses data entered in the VA column to calculate depreciation following Virginia law. The VA column must be completed to prepare a Virginia return.

West Virginia uses federal depreciation amounts for calculation purposes. Data entered in the WV column is not used to calculate amounts for the West Virginia return.

UltraTax CS uses data entered in the WI column to calculate depreciation following Wisconsin law. The WI column must be completed to prepare a Wisconsin return.

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