Prior Year Depreciation

[ramyun1]

While going thru my CA state tax return, TurboTax asked me to enter Prior Year Depreciation for a fence that was placed in service in 2022.  I don't know much about depreciation but I looked at my Depreciation & Amortization Report form 3885A for 2023 and the fence shows $114 in the Current Depreciation column and blank in the Prior Depreciation column.  I also looked at my form 3885A for 2022 when the fence was first placed in service and see $60 in the Current Depreciation column and blank in the Prior Depreciation column.  What should I enter as my Prior Year Depreciation?  The $114 amount, $60 amount, or the sum of the two $174.  Will I need to do this exercise every year when I prepare my taxes (like sum up the depreciation for all prior years)?  Also, what do I enter for AMT Prior Year Depreciation?  By the way the Depreciable Basis is $1,200 with Life of 15 yrs and 150DB/HY method in case that info helps.  Appreciate any help and guidance on this.

[AmeliesUncle]

You add them.

If you transfer the file each year, it should automatically put the "prior depreciation" on there.  However, because this is a California-specific thing, it is possible that the program may not carry it over, so I am unsure.

AMT depreciation is the same as regular depreciation.

[ramyun1]

Thank you for your helpful reply AmeliesUncle!

Can one of the Tax Experts confirm this is the proper way I should be entering my "prior year depreciation" on my CA state return; and whether TurboTax will be able to track it and automatically transfer it into my tax returns going forward; or if I need to do this manual exercise of calculating & entering my "prior year depreciation" every year.  I didn't get prompted for this last year by the way.  Please let me know, thanks!   

[KrisD15]

Yes, the prior response is correct. 

TurboTax does have a depreciation schedule in the Federal forms, which reports accumulated depreciation, (reports prior depreciation and remaining basis). 

If the depreciation reported on your California return is the same as that of the Federal return (the depreciation did not need to be adjusted) Form 3885A is not used, it is not needed. That might be the reason why there was no entry on Form 3885A for your prior year California return. 

If a taxpayer is subject to Alternative Minimum Tax (AMT) , depreciation may need to be or would have been previously adjusted. 

You would know if this pertained to you, therefore if you don't know what AMT is, or you know you never had to make an adjustment, the Depreciation entered for AMT depreciation is the same as regular Depreciation. 

Normally the depreciation is carried over year after year when using TurboTax, but there are times when it might snag with a state return. 

If you need to look it up, I suggest you look at the schedule in the Federal return. This is easier to find using Desktop.  

[ramyun1]

Thanks KrisD15 for your response!