I'm not familiar with the CA forms specifically, so can't help with exactly where the adjustment goes. But I did want to point out that you need to make sure you've also been adjusting your carryover losses in prior years.
For non-conforming states, the K-1 box 1 entry is incorrect in the state's eyes: it includes bonus depreciation. The K-1, on line 20Z, will give the bonus depreciation included in box 1. So each year, the state return needs to be adjusted to reflect this. Typically, all that does is change the suspended losses that carryover to the next year.
The reason this becomes important is that when you sell, that difference you're being shown in Ordinary Income exactly offsets the bonus depreciation that you've been adjusting in prior years. Entering one, without doing the other, is going to result in incorrect tax calculation.
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**Note also, I'm not a Tax Preparer/CPA. Just a volunteer, seasoned, TurboTax user.
Use any advice accordingly!
