How to add a Schedule E expense just for the state return?

[taxmo]

On the "Other" expenses field for a Schedule E rental property, I need to add an expense that is only for the state return and not for the federal return (it's a 481(a) adjustment for a form 3115 accounting method change to apply a cost segregation study, and California needs a different 481(a) adjustment because they don't conform to bonus depreciation). 

I think the way to do that is to enter an expense for the rental for the adjustment with "Source" set to "N" for the federal adjustment, and then a separate expense for CA with "Source" set to "S".  But that doesn't seem to work at all.  The "N" source amount still shows up on the CA return, and the "S" source amount doesn't show up anywhere, it doesn't flow to the CA return at all (the PDF output of the entire tax return is completely unchanged after adding an "S" source expense).

Edit:  This is in multi-state mode.  And I did find that it works fine if I change their "Resident State as of 12/31" to a different state, but that doesn't help because they're a CA resident.  The issue might be because CA residents are taxed on all their income regardless of the state, but we still need a way to specify a different expense specifically for the state for this type of situation.

[George4Tacks]

How about in Schedule E, Other Deductions you enter 481(a) adjustment and a -1 (ProConnect version of a Zero) for  Federal and the amount you want for CA? 

[taxmo]

ProConnect doesn't have separate federal/state fields for Schedule E expenses, so that doesn't really work that way for this.  It has an "Other expenses" field, which is what I'm using.  In multi-state mode you can choose the state and a "source" type.

[George4Tacks]

Okay, you are right. 

Try Modifications > CA Modifications > Other Subtractions (Click ...) > 481(a) adjustment and your amount.  That will put it on Schedule CA This gets it done

OR On Sch E input > Income Statement > Depreciation & Amortization > Regular tax [Override] Input the adjustment amount of depreciation. I don't like overrides

OR Sch E Add a depreciation item that is State Only , i.e. -1 for Federal and your adjustment *27.5 with a depreciation code of 85 This has become my favorite

[taxmo]

The CA Modifications option doesn't really do what I need it to do in this case because the actual taxable income isn't changing, just the amount that appears on form 3801 (California's passive activity loss limitations form) to carry forward to the next year.

The "Sch E Add a depreciation item that is State Only" option doesn't work because in this case I need to reduce the deductions on the CA return, not add more deductions.

Your second suggestion, "Sch E input > Income Statement > Depreciation & Amortization", it does work if I set a "State, if different" override amount.  Alright, that's one option.  But what a messy, terrible hacky way to have to do this. 

It really seems there is a bug with the software and it's not working the way it should.  The "source" field on the Other Expenses field should work.  But I don't know if there is really a good way to report ProConnect bugs.