My client, a resident of PA throughout all of 2020, is a limited partner in two CA rental real estate partnerships and needs to file in both CA and PA. I want to show the 754 depreciation separately for each partnership and thus entered this (negative) amount as a "Separately Stated Deduction" for each partnership. Using the "Allocate Multi-State Amounts" box, I made three entries (each with the same dollar amount) for the 754 Depreciation: CA (with "S" source), PA (with "S" source), and US. The amount flows through to the 1040 and 540 returns but not to the PA return. Please let me know what I am doing incorrectly. Thanks for your assistance.
Just by way of an update to my initial question...the separately stated 754 depreciation from the K-1 does indeed flow through to the PA return, but it flows through as "Net income or loss from business, profession or farm". It shows up this way despite the fact that I input it as a separately stated item on the K-1 screen. Any thoughts on how to rectify? Thank you.
George, A belated thank you for your response, which pointed me in the right direction to work things out. As a new user to Lacerte, I really struggled with entry of the IRC 754 Depreciation deduction, particularly the manner in which it flows through to the PA state return.
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