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

[aquatic101]

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.

[JeffreyR77]

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]

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.

[Sandy9108]

We are having the same problem with TurboTax not recognizing the Accumulated Federal Sec. 179 Expense on the State Adjustments to Federal Depreciation Amounts form. We can't find a way to override the zeros that appear on that form and would like to know if you have found a way to do it. We did find a way to remove the total amount which appears on Line 5 of the 500DM. That process corrects the K-1s but I would rather have a correct State Adjustments to Federal Depreciation Amounts form. I hate to force the adjustment through in total, not knowing what other problem that could cause. I would appreciate it if you could post your workaround method since, obviously, TurboTax is not going to correct their software glitch.

[aquatic101]

Maryland Form = On the State Adjustment to Federal Depreciation Amounts

Section = Sale of Assets with Section 179 Deduction Reported Separately on Federal 1120s/1065

Column = Federal Accumulated Depreciation

Line = (Right Click and Override Line zero next to each asset) Put the Federal Section 179  deprecation amounts that you took for each asset. 

This should make your 500DM come out correctly then.  Not sure why the Federal does not carry over correctly to the state return.

[Sandy9108]

Thanks so much for your quick response! We have numerous assets that are involved so it will take a while to make the changes but your solution seems to be working so far. Thanks again!