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Screen VADepr - Virginia Depreciation Adjustments (1040)

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Overview

Use this screen to enter adjustments to federal income for depreciation differences. The Virginia Depreciation Reconciliation and Adjustment for Disposition of Assets Worksheets calculate from data entered in the asset module. When not using detailed asset module data entry, enter all depreciation adjustments in this screen. When using the asset module, use this screen to enter any amounts different from the calculated amounts.

Adjustments for State Differences in Depreciation

Depreciation subject to basis limitations
Amounts in this statement are used to calculate the addition to income for federal bonus depreciation deducted on the federal return for Schedules C, E, F, and Form 4835 per activity.
1 line item is present in the statement for each federal activity. Columns for ordinary losses suspended by shareholder or partner basis, at-risk, or passive activity rules are automatically updated. The current-year difference between federal and Virginia depreciation is calculated from data entered in the asset module and displayed in the
Cr Yr Depr Difference
 column. For partnership activities, depreciation differences for unreimbursed partnership expenses (UPE) entered in the asset module are displayed in the
Cr Yr UPE Difference
 column.
Enter any prior-year bonus depreciation not yet added to income in the
Pr Yr Susp Bonus Add
 column. Enter any prior-year UPE not yet added to income in the
Pr Yr Susp UPE Add
 column.
Only line items with an amount in either depreciation column are included in the calculation of the Virginia Depreciation Reconciliation Worksheet.
The net of the 2 columns is in the
Total Bonus to Adjust
 column. A negative total is a current year depreciation difference resulting from a bonus addition to income in prior years. All current year negative differences are subtracted on the Virginia return.
A positive total is the result of bonus taken on the federal return in either the current year, or suspended from prior years, to be added to income. The addition is limited to the amount used to calculate federal adjusted gross income; any addition to income for bonus depreciation expense excluded from federal AGI calculations due to suspended losses is carried over to next year. Unreimbursed partner expense additions are limited by suspended passive activity losses only. All other additions are limited by all suspended losses.
For part-year returns, the
Part-year Instate Percentage
 column is updated based on federal data entry in the main activity screen or the allocation spreadsheet and may be changed as needed. The
Part-year Adjustment
 column is the
Adjustment to Income
 column multiplied by the
Part-year Instate Percentage
 column. This is included in calculating the Virginia Schedule of Income.
Depreciation subject to basis
Use these fields to force a total depreciation adjustment for all business, farm, rental, farm rental, or pass-through activities or when the asset module isn't used. An entry in these fields overrides all data entry for the filer in the
Depreciation subject to basis limitations
 statement. A force for either the taxpayer or spouse forces the adjustment for only that filer. The
Instate
 fields are used only for part-year returns.
note
For part-year returns, a force amount in either the everywhere or instate field requires a force in both everywhere and instate fields for that filer.
Disposition adjustment
The Virginia Adjustment for Disposition of Assets Worksheet calculates the adjustment to income for disposals from data entry in the asset module. All disposed assets that qualified for bonus depreciation are included in full in the calculation of the worksheet. Instate adjustments are based on the ZIP Code in the asset module. Use these force fields when the asset module is not used or to force an amount different from the calculated amount. An adjustment may be required for part-year returns with activities that use the allocation spreadsheet or for rental activities with a partial ownership percentage.
Other depreciation
UltraTax CS defaults to calculating the depreciation for assets entered in the asset module for Form 2106 units with special occupation codes
1, Qualified artist
,
3, Fee-based official
, or
5, Reserve component
 to calculate the Depreciation Reconciliation Worksheet.
The difference between federal and Virginia depreciation is included on as an adjustment to income on the Fixed Date Conformity Worksheet. Use these fields to force an amount different from the calculated amount or when the asset module isn't used.
Instate
 fields are used only for part-year returns to calculate the Virginia Schedule of Income.
Form 2106 depreciation
UltraTax CS defaults to calculating the depreciation expense for assets entered in the asset module for Form 2106 units with special occupation codes blank or
4, Nonfarm Schedule SE
 to calculate the Depreciation Reconciliation Worksheet. The difference between federal and Virginia depreciation is included on as an adjustment to Unreimbursed employee expenses on the Itemized Deductions Worksheet. Use these fields to force an amount different from the calculated amount or when the asset module is not used. Instate fields are used only for part-year returns.

Fixed Date Conformity Adjustments

UltraTax CS automatically calculates the Fixed Date Conformity adjustment for depreciation. Use this section to enter fixed date conformity adjustments to federal adjusted gross income for any other reason. Everywhere amounts are included on the Fixed Date Conformity Worksheet.
Instate
 amounts apply to part-year returns only and are included in the calculation of the Schedule of Income, Page 1.

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