When inputting K-1 differences into the California Form 540 worksheet, the approach depends on the specific instructions provided by your tax software or the California Franchise Tax Board. Generally:
- Adjustment Difference: If the California K-1 amounts differ from the federal K-1 amounts, you typically input the adjustment difference to reconcile the two. This ensures that the California return reflects the correct state-specific amounts.
- Final Difference: In some cases, you may need to input the final California-specific amounts directly, especially if the software or worksheet prompts you to do so.
It's important to carefully review the California K-1 instructions for proper compliance.
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