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How to handle prior year special depreciation for Sch E for california/state tax

  • On my tax return for last year on my rental property Sch E, my tax person took a "special depreciation" 
  • This special depreciation was about $24,000, and per my understanding, it was partially absorbed on the federal side and partly rolled over to 2022 tax year
    • On the federal side, the $24,000 was entirely taken for the 2021 tax year due to special depreciation
    • On the state side, it is being split over 15 years
  • How do I enter the special depreciation on my current tax return, in essence entering the special depreciation from last year (that was fully depreciated on federal), but only 1 year depreciated on state side. 
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1 Reply
ThomasM125
Expert Alumni

How to handle prior year special depreciation for Sch E for california/state tax

When you enter the asset in the federal portion of the program, you will be asked to enter the special depreciation allowance taken when you purchased it. You will also enter in the date put into service for the business and the cost. Once your enter this information, TurboTax should have enough information to calculate the correct depreciation for the current year on the federal and state tax return.

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