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aquatic101
Returning Member

Maryland Pass through Entity for an S Corporation - State Adjustments to Federal Depreciation Amounts

Maryland Pass through Entity for an S Corporation

On the State Adjustments to Federal Depreciation Amounts - Sale of 179 Assets with 179 Deduction reported separately on 1120S/1065, the Federal Accumulated Depreciation always defaults to zero, when in fact the full 179 deduction was taken.  I have to over ride this amount and put the full 179 depreciation amount in this column according to my accountant.  Otherwise form 500DM is incorrect.  Why does Turbo Tax not correct this or is this difference in the main activity (A) above.  Thank you for your consideration in answering this as this can be a costly mistake, if not entered correctly.

 

2 Replies
JeffreyR77
Expert Alumni

Maryland Pass through Entity for an S Corporation - State Adjustments to Federal Depreciation Amounts

Maryland tax law does not conform to Federal tax law for section 179. 

 

When the full allowable Federal section 179 amount has been deducted, an adjustment is required to be made on the Maryland return. 

 

The taxpayer has the option to elect the full state allowed section 179 amount and then will need to carry the remaining balance on the deprecation table going forward.

 

Maryland Decoupling from Federal Tax (see Federal Bonus Depreciation Allowances and Section 179 Expe...

aquatic101
Returning Member

Maryland Pass through Entity for an S Corporation - State Adjustments to Federal Depreciation Amounts

I am talking about the MD State Return - State Adjustments to Federal Depreciation Amounts.  Why does Turbotax populate with zero for the federal depreciation instead of the Section 179 amount to show the correct Federal and State difference?  I had to amend three years of tax returns, when my accountant first found this error in Turbotax for accumulated depreciation.

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