Question

Adjustments Preferences value in Form 4562 and From 3885A

Forum|Forum|3 years ago
March 26, 2023
1 reply
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Hi,

There are two set of form 4562 and 3885A in Federal and California Tax return. In the set of forms with title "Alternative Minimum Tax Depreciation Report", the last column is "Adjustments Preferences". My question is about the value in this column.

In my 2021 Tax return, the value in column "Adjustments Preferences" in both form 4562 and form 3885A are the same. But in my 2022 Tax Return, the value is big different in these two forms. Wonder,

1) Is tax law changed in 2022 and impacted this value?

2) Is my answer somewhere in TurboTax different from 2021 and impacted this value?

3) How is this value calculated in TurboTax? I could not find it anywhere.

Appreciate your help!

Thanks,

Belinda

R

RobertB4444

This is the depreciation adjustment that is made if you are impacted by the Alternative Minimum Tax. The adjustment reflects the amount that would be changed in calculating the AMT for your particular situation. The amount of the adjustment changes based on your other income and deduction amounts. So it isn't effected by any new laws this year. Your income and deductions are just different this year than last, apparently.

The calculation for this is fairly complicated. If you have form 6251 in your return you can look at that form and the associated worksheets to see the calculations that are being done. The actual AMT effects very few taxpayers as a percentage so it probably has no effect on you but if it does the 6251 will show the calculations as to why.

@9month9wine

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9

9month9wineAuthor

Hi,

I did a test in TurboTax, lower W2 income but this did not change the 40 year depreciation life in California tax return. Appreciate if you can show me the specific tax law saying that using 40 years as depreciation life rather than 30 years in California Tax Return for the property put into service in 2019 (after 2018).

Thanks,

Belinda

R

RobertB4444

No, you should have a 30 year depreciation schedule for any assets placed in service after 2017. If TurboTax is trying to depreciate an asset over 40 years there would seem to be a mis-entered date somewhere. Or you may need to delete the asset and re-enter it.

@9month9wine

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