Kitty,
Thank you for your response. Yes indeed the Federal AGI recapture the full amount of depreciation correctly. CA is based on the Federal AGI, and thus also recaptured the full amount of depreciation, but CA schedule adjusts (not allow) my loss by $5000. Essentially CA recaptured the $5000 depreciation but does not allow the same $500 as loss. So I am taxed by CA for the $5000 depreciation I am not allowed to deduct from my income in 2022.
Any suggestion?
Thanks again.
Frank
