1120s Solar Equipment Depreciation Basis Adjustment (or Salvage Value)

[artygallo]

Doing an 1120s Return for my buinsess in Turbo Tax Desk Top. I am taking a 30% solar credit for a project placed in service in 2022. On the federal depriciation schedule I have to reduce the basis by 50% of the solar credit (15% of total equipment value).  For CA state return I do not need to reduce the the basis of the asset.

Is there a way to put the cost of the asset in the federal return and then reduce the basis by 15%. Or create a slavage value for that amount. The software has the basis flowing through to the state return and I cannot fine a way to make them different. 

[Opus 17]

Please clarify.  The section 25D credit is only available for your residence, not your business.  There are different credits for businesses that I don't know anything about, but I don't think they are 30%.  For the residential credit, your basis is reduced by the full amount of the federal credit, plus the full amount of any state credits or utility rebates.

If you installed the solar panels on a property that was 50% a residence and 50% a business, then you only claim 50% of the cost for the residential 30% credit under section 25D.

[artygallo]

I was referring to the Investment Tax Credit for Businesses (Sec 48)

To be eligible for the business ITC or PTC, the solar system must be:

• Located in the United States or U.S. territories
• Use new and limited previously used equipment
• Not leased to a tax-exempt entity (e.g., a school), though tax exempt entities are eligible to receive the ITC themselves in the form of a direct payment.

But my question is is there a way to have my basis diferent on the Fed and State asset work sheets?

[ThomasM125]

I'm not sure if there is a way to change the basis for the state asset separate from the federal basis. However, you may be able to file the federal return before you file the state return, thereby allowing you to change the basis on the federal return just to get the correct basis on the state return, and then you can file the state return.

[artygallo · Accepted solution]

Thanks, guys for helping me work on this issue.  I did figure out a solution this morning. 

If you right-click on the basis box on the asset worksheet it will give you the option to override the basis amount.  I did not get an error message by doing that either and my state depreciation amount for the year is correct.