California Form 3885A: Asset Entry Worksheet "Prior Depreciation" Locked at $0 for Fully Expensed Federal Assets

[user17709997215]

I am using TurboTax Premier Desktop (Mac) and have multiple rental assets facing a California depreciation discrepancy.

The Issue: I have an asset (espresso machine) purchased in 2022 for $218. In 2022, I took a full Federal Section 179 deduction. However, California (which doesn't conform to Sec 179 for this asset) began a standard depreciation schedule.

• CA Depreciation taken: 2022 ($39), 2023 ($62), 2024 ($62).

• The Problem: For every year, the California Asset Entry Worksheet shows "$0" for Prior Depreciation. Now, in 2025, the software is trying to take another $62, which would exceed the $218 cost basis.

The "Prior Depreciation" field in the California column of the Asset Entry Worksheet is locked and not editable.

Solutions I've Considered:

1. Taking the asset out of service: Manually stopping depreciation on the date where the current depreciated value is equal to the remaining basis.

2. Modifying Federal Prior Depreciation: I noticed I can modify the Federal prior depreciation value to get it to carry over to California correctly. A turbo tax advisor (not product solutions) mentioned if the IRS inquires, I can write a letter explaining my motivation. I really don't want to cause any confusion or "hack" my Federal forms to fix a state calculation.

I have multiple assets (laptops, furniture, etc.) all with this problem. I don’t want to amend any of the previous returns since if I don’t over depreciate, I don’t believe there will be a material difference.

My Question: Can anyone help me with a better solution than “hacking” the software to match up the numbers exactly? Is this a TurboTax bug where it fails to track California prior depreciation once a Federal asset is fully expensed, or am I doing something wrong? 

[PatriciaV]

We would like to research this further. It would be helpful to have a TurboTax ".tax2025" file that is experiencing this issue.

You can send us a “diagnostic” file that has your “numbers” but not your personal information.  If you would like to do this, please follow these instructions: 

In TurboTax Online, open your return, go to the black panel on the left side of your program and select Tax Tools. 

1. Then select Tools below Tax Tools.
2. A window will pop up which says Tools Center.
3. On this screen, select Share my file with Agent.
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number.
5. You may wish to snap a screenshot to post instead of the actual number.
6. Reply to this thread with your Token number (including the dash) and tag (@) the Expert requesting the token from you.
7. Please include any States that are part of your return - this is VERY important.

If you are using TurboTax for Desktop, go to Online in the top menu, then choose "Send Tax File to Agent."

We will then be able to see the same experience you are having. If we are able to determine the cause, we'll reply here and possibly provide you with a resolution. 

[user17709997215]

Hi Patricia,

Thank you for your offer to research more on my issue. After pondering on this issue for several days since I posted, I have found a solution to not over depreciating.

I do not feel comfortable sending in my tax file and don't really have time to send in a cleansed one. If you like to investigate further for me and your other customers, I can offer up an hour or 2 with someone who is knowledgeable on this issue on the phone explaining what happened and try things out. I already spend an hour total with a product solution specialist who really didn't have the knowledge to help me and a tax advisor who suggested to modify my federal to fix state. I assume you can find me through my login. If not, please let me know of a way I can reach out directly. 

Please note this prior depreciation not carried over has occurred for many years. I just found out now. I have been a loyal TTax customer for over 10 years. My original question is how do I change prior depreciation of a rental asset in ca tax form without affecting the federal one as I have taken Section 179 in federal in year 1 already. Their depreciation schedule is different. 

Thank you for your time. 

[PatriciaV]

When you send your file to an agent within TurboTax, the software creates an anonymous return without your personal information. You don't need to do more than provide a screenshot of the token displayed in TurboTax. We can then review the depreciation situation you have described and possibly provide you with a resolution.