Depreciation - Non-Conforming States

[pconradcpa]

I've prepared a partnership return using Proseries, and one of the partners lives in a state that does not conform to Bonus Depreciation.  I've seen footnotes on K-1s prepared by other CPAs (and not using Proseries) that says 'Non-Conforming State Adjustment - Federal Bonus Depreciation ... $XX,XXX'.  How do I add Supplemental Information on a K-1 for the Bonus Depreciation adjustment for a Non-Conforming State?  This particular partnership has 200+ partners who are spread over many states, so I'd prefer to not calculate this manually and add a manual Supplemental Information entry on each partners K-1.  Thanks!  Paul

[IRonMaN]

The state in question doesn't have its own K-1 type form to reflect the add back?

[pconradcpa]

The partnership is in Tennessee, which doesn't have an income tax.  So Proseries prepares a Federal return along with Federal K-1s.  But no state return is required (not for Tennessee, or for any other state, because the apartment is located in Tennessee).  However, some of the partners are not in Tennessee.  So I'm looking to add a non-conforming state depreciation adjustment added as supplemental information to the Federal K-1s.  This would accommodate the partners who are in other states for them to prepare their state returns.  I've seen this on K-1s prepared by other CPAs, and am trying to figure out a way to add this using Proseries.

[Strongsilence-CPA]

If you indicate the resident state for a partner, won't ProSeries give you a notification that you might need to prepare the K-1 for that resident state? Then you would add that state. I use Lacerte.

There must be a way to avoid manual calculations.  If you are truly facing that, then perhaps a Fixed Asset software would be useful.

[pconradcpa]

In Proseries, I do enter the address for each partner (including the state that partner resides in).  So on the surface I'd think that Proseries should know which states all the partners live in, which states are non-conforming, and give me the option to add some Supplemental Information to the Federal K-1 for those partners that live in non-conforming states.  Maybe I'm giving Proseries too much credit.  But I'd prefer to not use different tax software for this one tax return.

One of the partners who lives in Indiana (the apartment and tax return are Tennessee) called me and we discussed this.  She was very nice on the phone, and even emailed me a copy of a Federal K-1 she receives for another real estate partnership where the Non-Conforming State Depreciation Adjustment is shown in the Supplemental Information on the Federal K-1 (I'd be willing to forward it to anyone else as an example...assuming the partner gives me permission to do that).

I've placed a call to Proseries posing this question, but so far no response.

[sjrcpa]

You will need to manually compute depreciation without bonus.

Then you need to find a way to get a statement showing the adjustment on the applicable K-1s. I don't use ProSeries so can't help with that.

[PATAX]

I agree with Sue and I think she's correct. This is one of the reasons I do not like that bonus depreciation for business clients. Then you have to keep two separate depreciation schedules for the business client if it is in a state that does not recognize or conform to bonus depreciation.

[pconradcpa]

Well that's kind of a bummer.  So far Proseries Help hasn't responded yet.  Crossing my fingers there is a way that Proseries can handle this without me handling it manually.  I'll let y'all know.  Thanks for all the responses in the meantime!