Special Depreciation Allowance and K-1

Forum|Forum|3 years ago
March 23, 2023
1 reply
0 views

I am a partner in a multi-member LLC and received a K-1. The partnership claimed a special depreciation allowance for qualified property placed in service during the tax year and used it to calculate each partner's ordinary business income. The ordinary business income is reported on the K-1; the depreciation figure is not.

The state of Maine does not conform to federal depreciation rules so I have to calculate the bonus depreciation add-back for my state taxes. Because the depreciation was already calculated as part of my K-1 ordinary income, TurboTax is not giving me the option to enter the information for the Maine bonus depreciation add-back or an associated capital investment credit that I am eligible for. (When I try to claim the capital investment credit, TurboTax tells me, "This credit is available to businesses that invest in depreciable property in Maine in the current year. You have not entered any eligible property. If you invested in eligible property in Maine this year, go back and enter it on your Federal return and it will transfer to your Maine return.")

Where can I enter the special depreciation information so that TurboTax properly calculates Maine state taxes?

TurboTax Premier Online

ThomasM125

After you enter your K-1 for the partnership, you will see a screen that says Describe the Partnership and you need to choose the I am required to pay supplemental business expenses on half of this partnership option.

As you work through that section, you will come to a screen that says Report Asset Information and you will be able to enter the equipment the partnership depreciated and TurboTax will calculate the bonus deprecaiton that you can then use on the state return to make the necessary adjustment and credit application. You will have to go back and adjust the income reported on the K-1 to add back the amount deducted for depreciation so your net income will be correct.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"