I used sec 179 bonus to deduct the full price of a heavy suv in 2019. TT is calculating a depreciation deduction for 2020 as well which doesn't seem right.

[jeff-lesauvage]

Using section 179   bonus depreciation I expensed the full cost of the vehicle purchased

[DaveF1006]

Yes, you are correct. There should be no depreciation deduction this year. Did you file with Turbo Tax last year? If so, the information should have populated in 2020. If not, it may have been how you recorded your answers in the program.

[jeff-lesauvage]

Yes - filed with them last year as well.  It wouldn't even let me enter nor confirm the 2019 depreciation - just said "importing from 2019 return" and came to its conclusion that depreciation is warranted.

The only thing I can think of is that only 96% was depreciated in year one due to 96% business usage, and perhaps the residual is being depreciated in 2020?

[DaveF1006]

What was the total amount of your vehicle in 2019 and how much depreciation does Turbo Tax allow you to have this year?

[jeff-lesauvage]

So it turns out that when transferring the vehicles from the prior year's return, TurboTax does not pull in the bonus depreciation taken in year one and therefore assumes there is more depreciation to be had.  I find it strange that TT doesn't - at the very least - ask you if you've taken bonus depreciation on the vehicle when adding in the new year's expenses, mileage, etc.  

I ultimately had to delete the vehicles and re-add them one by one, at which point it does ask you for the prior year sec 179, bonus depreciation, etc, so that it can accurately calculate a basis of $0 and therefore does not calculate any depreciation for the new tax year.

Above said, it seems to introduce a new problem now at the state level.  NY State does not allow sec-179 and bonus depreciation on heavy-SUVs; so, in year one the full amount of my car was deducted (sec 179 + bonus), but from NY states perspective that special depreciation & sec 179 is now allowed forcing you to depreciate on the standard 5 year schedule on the state returns.  In previewing my 2020 return forms, it's now showing a depreciation basis for my car in the NY state return at $6,590 when in fact the depreciation basis should be far higher than that.

Any way I can override the calculated depreciation basis only in the NY return on form IT-398, leaving the federal forms and worksheets unchanged?  Any help would be greatly appreciated!

[DaveF1006 · Accepted solution]

Yes, if you have the Turbo Tax software, you can enter or change the New York Depreciation Deduction wherever the SUV is listed in IT-398. If you use the online version of Turbo Tax, you will not be able to make this correction.

[jeff-lesauvage]

Got it, thanks!  I was hoping to not have to re-do everything and stick with the online version, but looks like that's the best path forward.