There is an error in the California Asset Entry Worksheet when a depreciated asset is sold - possibly in the case that Federal 179 deduction was taken but CA was depreciated (since I have another asset where both were depreciated and it works fine). The error is that line 8, Prior Depreciation, is not picking up the prior depreciation - probably because as I look at my 3885A Depreciation schedule, for some reason the prior depreciation for this asset (but not others) has disappeared. Last year (2023) was the year that it fully depreciated.
In my case a rental unit sold this year had about $8k of appliances that were fully depreciated for CA, but 179'd for Feds several years ago. I reported the 179 expense on the disposition worksheet for Federal. I thought that CA would pull through the depreciation, but I noticed on the CA Adjustments schedule that it was giving me a negative adjustment in income onto my 540. I tracked it down to the asset worksheet.
I have found that I CANNOT override it by putting in Line 8 prior depreciation - TT makes no change to the tax liability. However if I input it as Line 6 179 Expense, the calculation corrects itself and does not report as an error. (I also tried one other way to fix it that I cannot remember - it fixed the tax liability but reported as an error so I would not be able to file.)
Also, interestingly, the feedback between the Asset Entry sheet and the 3885A Report is backwards. When I input Line 6 on the Asset Entry sheet the 3885A is changed by the amount input. Feedback seemingly should run the other way.
Anyone else hit this?
