California Depreciation Off Balance in 2021 Partnerships

Forum|Forum|4 years ago
February 3, 2022
2 replies
15 views

2017- 2019 Depreciation assets that I have had no issues with, is now throwing my Partnership 568 tax return (CA) off balance.

Federal and State was deprecating differently and has been that way since the assets were placed in service. All of a sudden in 2021 I am off balance with state only and it is the difference between Fed and State depreciation.

Federal balances perfectly, state does as well except for the depreciation. I double checked 2018, 2019 and 2020 and everything has carried over exactly as it should.

I am not sure what to do. Is this a Lacerte issue? How do I fix this?

One client is only off $55. But another client is off $1300. I am not sure where I should adjust to fix this.

Lacerte Tax

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joshuabarksatlcs

Level 9

Need to alert Lacerte.

In the 2021 Partnership software, State return M-2 Line 3, Book Income is pulling the Tax Income (Line 9 of M-1) instead of the Book Income (Line 1 of M-1).

In the 2020 Partnership software, State return M-2 Line 3 pulls the Book income (Line 1 of M-1).

I have sent an inquiry to Lacerte Support.

Stay tuned.

I come here for kudos and IRonMaN's jokes.

L

linaAuthor

Level 3

Thank you!!

M

Maureen945

Level 3

I am having the same issue! There was a couple of assets sold, and because of the depreciation and gain difference, State Return M2 is pulling down the tax income instead of book income. I am so glad I checked here. Hopefully they will have it resolved??

joshuabarksatlcs

Level 9

There is nothing "to fix". Beginning this year, Line 3 of M-2 is pulling Line 9 of M-1 instead of Line 1 of M-1. The user just have to reconcile between the TAX basis to the balance sheet -

Two simple ways:

1. use the CA tax basis for Sch L. Keep two sets of Sch L's when there are book/tax and/or CA/fed differences.

2, live and let live the difference between the M-2 capital (tax basis) and the Sch L capital balance

3. select NOT to use the federal Sch L for CA.

But then, didnt i just say two???

I come here for kudos and IRonMaN's jokes.

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