Follow these steps:
- Look at your Federal Form 4562 (Depreciation and Amortization).
- Check Line 14 (Special depreciation allowance) or Part I (Section 179). If there is a number there, that is your culprit.
- Check your Depreciation Asset Report. Look for any asset that isn't the "Residential Building" (27.5-year). If you see an asset with a "Special Allowance" or "179" column, that $222 is the adjustment to bring that asset back to DC's "slow" rules.
Here's why:
- Federal may have applied a 60% or 40% "Bonus" depreciation to 5-year and 15-year assets automatically unless you specifically checked a box to "Elect Out."
- If you bought a $500 lawnmower or a $1,000 fridge, TurboTax might have applied Bonus Depreciation to it on the federal side.
- DC rejects that bonus. The $222 is likely the difference between the "bonus" you got on federal and the "slow" depreciation DC requires.
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