How do I post CA Section 179 depreciation? Does Lacerte take the first $25K from my Federal allocation and automatically post to CA? In looking at a CA K-1 it looks on line 11 like all my Federal 179 has been removed for the CA K-1.
Does CA allow section179 deduction. If it doesn't, this is the reason for the subtraction. Many states do not allow section179.
Actually, Peter, I have found many states which accept the first $25K of Section 179, and require normal depreciation of the excess cost. Maybe there are some states which are so "stingy" that they don't even allow any Section 179.
Gene, are you doing a 1040, or are you doing a California p'ship (or S-Corp, or whatever) return? If you're doing a p'ship, you can probably see what's happening with depreciation at the p'ship level and then get an understanding of the difference between Federal and state Section 179, the difference between Federal and state "net income," etc.
If you're doing a 1040, maybe you can talk to the accountant who did the p'ship, to see if they can shed light on the subject. Or take a good look at the CA net income on the K-1; is it lower than the Federal net income on the Federal K-1? That might be what's happening with the Section 179 vs depreciation.
I'm not sure if the accountant could elect to treat Section 179 differently at the state level than Federal (such as, opting out of doing any 179 at all for the state, even though a large amount of 179 went thru for Federal). If so, that might account for your difference, but again, you'd have to see if the state bottom line is a lot lower than the Federal bottom line.
The problem was that the client had $200K + of new depreciable assets, but not $200K of new Section 179 assets. Federal correctly allowed Section 179 but CA return incorrectly assumed the $200K were 179 assets when they were not (tenant improvements). I had to trick the program into classifying these into another category that depreciated them in CA, but didn't count them as disqualifying Section 179 assets. So, based on this interaction with Lacerte tech support it appears to me there is/was a bug in the 2007 program that incorrectly disqualified some assets from Section 179 for CA returns. I'll have to test this for 2008 to see if it has been corrected there.
