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Calculation

State depreciation overview

Overview

Each client can calculate up to 50 state depreciation treatments and ACE and AMT treatments for each state.
State treatments can be set up:
  • Automatically, when an UltraTax CS state return that requires a state treatment is added to the client. If appropriate, state AMT and state ACE treatment columns are also added to the client.
  • Through the Add State Treatment window. This window opens automatically when a situs, for which a state treatment hasn’t been enabled, is added to the client.
  • Manually, using the
    Setup
     then
    Treatment
     window.
State treatments calculate based on the bonus depreciation laws and section 179 limits applicable to the state postal code entered in the
Setup
,
Treatments
 then
Classify
 window. You can override a treatment's section 179 limits.
A state treatment transfers to the UltraTax CS state return that matches the state ZIP Code entered for that treatment in the
Setup
,
Treatments
 then
Classify
 window (except when not applicable). The following treatments also transfer to UltraTax CS returns.
  • The NYC treatment transfers to the New York City return.
  • The NJ 30% bonus treatment transfers to the New Jersey return for 1120, 1065, and 1041 clients.
  • The PA Straight-Line treatment transfers to the Pennsylvania return for 1120S and 1065 clients.
  • The CA AMT and IA AMT treatments transfer to the California (1120, 1065, 1040, and 1041) and Iowa (1120) returns, respectively. If the treatments aren't set up, the adjustments will be calculated using the Tax AMT amounts.
  • The CA ACE and the IA ACE treatments transfer to the California (1120 and 1065) and Iowa (1120) returns, respectively. If the treatments aren't set up, the adjustments will be calculated using the Tax ACE amounts.

The depreciation treatment isn't applicable for some state returns

For some states, the depreciation treatment isn't needed and won’t be used by the UltraTax CS state return. The treatment won’t be set up automatically when that UltraTax CS state return is added to the client.
Depreciation may not be applicable for the following reasons.
  • The state return isn't an income tax return.
  • State depreciation isn't calculated differently from federal depreciation.
  • The state adjustment for the federal bonus depreciation is an add back of the amount taken on a federal form (rather than the difference between depreciation calculated with the bonus and depreciation calculated without the bonus). These states include:
    • 1040 & 1065 entities: CT, FL, IL, MN*, NC, NE, and OH
    • 1120C entities: FL, IL, MN*, NC, NE, OH, OK, and PA*
    • 1120S entities: CT, FL, IL, MN*, NC, NE, and OH
    • 1041 entities: AZ, FL, IL, MN*, NC, NE, OH, and OK
note
Pennsylvania and Minnesota no longer do an add back for assets placed in service on or after 9/27/17.

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