Maryland Net Decoupling Modification

[richlux]

I'm using TurboTax Deluxe Desktop and I have a MD K-1 from a pass through entity (LLC) that has an entry in Section B. Additions, Line 3 "Net Decoupling Modification".  I expected TurboTax to ask for this amount and automatically create the 500DM form for Decoupling Modification, but it isn't.  Does anyone know where I should enter this number to have TT create the 500DM form?

Thanks,

Rich

[RobertB4444]

@richlux  The 500DM will be generated automatically if there is any information on your federal return that requires it.  The list of reasons is -

• Special Depreciation Allowance under the federal Job Creation and Worker Assistance Act of 2002 (JCWAA) as increased and extended under the federal Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA); and subsequent federal legislation, including the American Recovery and Reinvestment Act of 2009 (ARRA).

• Carryover of a net operating loss (NOL) under IRC Section 172 without regard to an election under IRC Section 172(b)(1)(H) for a carryback period of up to 2 years (Farming loss only).

• Federal Section 179 depreciation deductions taken for a tax year beginning on or after January 1, 2003. For Maryland tax purposes, a taxpayer only is allowed to expense up to $25,000, reduced dollar-for-dollar by the amount over $200,000, of the cost of Section 179 property that is purchased and put in service for a trade or business for the tax year. For vehicles placed in service after May 31, 2004, Maryland also has decoupled from the higher depreciation deduction for certain heavy duty SUVs allowed under Internal Revenue Code Section 280F.

• Deferral of recognition of income from discharge of indebtedness under the ARRA.

• Deferral of deduction for original issue discount in debt for debt exchanges under the ARRA.

Here is the original article that the above list comes from.

[richlux]

Thank you! I see it when I view the Forms.  The decoupling modification is because I took the qualified improvement property (QlP) bonus depreciation (100% for the first year) on my Federal return.  Will TurboTax Business keep track of the depreciation for Maryland for future years or will I need to do this myself?

Thanks,

Rich

[Cynthiad66 · Accepted solution]

TurboTax does not track depreciation on a year-by-year basis (i.e., the program does not generate a list of the depreciation deductions allowed for each tax year).

Rather, TurboTax generates a depreciation report which lists the cumulative depreciation (for all prior tax years) and the depreciation for the current year.

You should print/save Form 4562 from your tax return each year.  This list each property and depreciation information, for your own records.

@richlux

[richlux]

Thanks!

Rich