How do I address Georgia taxing my 179 depreciation for an out of state property?

[CUB1988]

I have agricultural property in another state and pay state income taxes in that state. My home state of Georgia is adding back the 179 bonus depreciation that I took for the out-of-state properties. I verified that  the rental property addresses on the properties were all correct.  I didn't pay any tax in the other state as 179 depreciation resulted in a loss for the year that will carry forward.  But in the mean time, Turbo Tax is increasing my state income tax in Georgia which doesn't seem correct.  What am I missing? 

[AliciaP1]

GA did not adopt the allowable Section 179 deduction for certain real property so your GA return is correct in adding back the deduction.  You can read through GA Tax Changes for the specific reference, but it reads:

Georgia has not, however, adopted the Section 179 deduction for certain real property (I.R.C. Sections 179(d)(1)(B)(ii)).

[CUB1988]

Yes. I had seen the same posting.  What is primarily troubling is that the properties, income, depreciation, gains, losses, are all in another state outside of GA, yet I'm getting taxed in GA on transactions that have nothing to do w/ GA.  The second troubling part is that there does not seem to be an adjustment.  Even if 179 is not allowed, there should still be another method that could be applied as an adjustment.  TurboTax does not seem to have either consideration of which state the 179 took place in, nor an adjustment from 179 to some other acceptable method.  Any thoughts/suggestions are welcome. 

[AliciaP1]

You should be preparing the non-resident state tax return first then your GA return.  Allocate all the income and expenses that belong to the non-resident state and verify the allocation to GA of the remaining income.  You need to go back through the state interview questions, non-resident state then GA, and make the correction to the allocation of the Section 179 deduction.

@CUB1988 

[CUB1988]

The other state is Iowa.  Had processed Iowa first, before GA.  As suggested,  I re-ran thru all of the questions related to Iowa.  The Iowa interview questions do not specifically ask me to allocate the 179 deduction. However, the 179 deduction is on an Iowa property and Turbo tax for Iowa is allowing the deduction. 100% of the rents/royalties/ income/loss had already been attributed to Iowa.  The addresses of the property in question is correctly listed as Iowa.  TurboTax GA is still insisting on making a DEPRECIATION ADJUSTMENT to increase GA income on the basis of the 179 bonus dep from Iowa. This is resulting in a payment due in GA when I think I should be getting a refund.  TurboTax GA does not allow me to override the DEPRECIATION ADJUSTMENT.  Any other suggestions?   I don't think this can be the correct interpretation of the tax code.  If GA is not going to allow 179 bonus for another state, at a minimum there should be a means to adjust for using a different method. At the moment GA is disallowing the entire deduction and adjusting my FED AGI upward by 100% of the 179 deduction.  Please advise. 

[CUB1988]

One other clarification.  There is an Override on the Edit menu. But it does not work to accomplish the override.  When I override to set to zero, TurboTax moves the full ADJUSTMENT to line 2 in the Adjustments to Increase Income page for GA.  The net is that override is not possible for GA in this scenario.

[AliciaP1]

It would be helpful to have a TurboTax ".tax2022" file that is experiencing this issue.

You can send us a “diagnostic” file that has your “numbers” but not your personal information.  If you would like to do this, here are the instructions: 

In TurboTax Online, go to the black panel on the left side of your program and select Tax Tools. 

1. Then select Tools below Tax Tools. 
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent. 
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number. 

In TurboTax CD/Download versions, go to the black panel on the top of your screen and select Online. 

1. Scroll down to and select Send tax file to Agent. 
2. You will see a message explaining what the diagnostic copy is.  Click send through this screen and then you will get a Token number. 

Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.   

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.

@CUB1988 

[CUB1988]

Token 

1125988

[CUB1988]

Did you receive the information requested?

[AliciaP1]

Upon review, since the GA individual tax return starts with Federal AGI and the section 179 expense (already deducted from that number on the federal return) is disallowed in GA, TurboTax is correctly adding the amount back to your income.  However, you still need to deduct the net loss from the IA properties from the GA income.  The net results from the IA properties by my calculations from your Schedule Es is a loss of $46, 458.  The GA add-back for depreciation not allowed is $75, 967.  You need to enter as an Other Subtraction from Georgia Income the difference of $29,509.

To enter this subtraction in TurboTax you can follow these steps:

1. Within your tax returns click on State Taxes/Prepare State and Continue/Let's Get Started
2. Click Edit for your GA return
3. Click Edit for the Income section
4. Scroll down to Other Subtractions from Georgia Income under the Miscellaneous section and click Start
5. Enter a description (IA property income would be reasonable or something to the effect) and $29,509 in the amount field
6. Proceed entering/reviewing your return

@CUB1988 

[CUB1988]

OK.  That's interesting and helpful.   Maybe my final questions?   

Why is the subtraction on the GA return the difference ($29K) vs, the actual Iowa loss itself ($46K)?  

How would this impact 2024?  Is the remainder carried forward to 2024 as a disallowed 179 deduction/loss and entered in the MISC subtractions?