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Screen VAAdjS — Virginia Modifications to Federal Taxable Income (1120)

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Additions

The application transfers amounts from the
Taxes and licenses
 statement in the federal
Inc screens
. The application assumes these amounts aren't taxable to Virginia. Enter adjustments to state and local income taxes in the
State Amount
 column of the statement.
Tax-exempt interest and expenses attributable to tax-exempt interest transfer to this statement from the federal return. To include tax exempt interest and expenses in the return, enter adjustments in the
State Amount
 column of the statement.

Subtractions

Amounts in this statement transfer from
US obligation interest
 in the federal
Inc screen
 and
K1 screen
. To exclude an item from the state return, delete the amount or the entire line item from the statement. The application displays the modified column in black and won’t replace the new data with subsequent federal-to-state data transfers.
Interest income transfers to this statement from the federal return. To include Virginia interest in the return, enter adjustments in the
State Amount
 column of the statement.
Enter the amount of federal work opportunity credit eligible wages. If this field is left blank, the application defaults to the amount on federal Form 5884.

Sale or Exchange of Section 179 Property

Per the Form 4797 instructions, S Corporations are required to separately report to the shareholders the sale, exchange, or other disposition of assets where a Section 179 expense deduction was claimed in a prior year. These asset dispositions are no longer reported on federal Form 4797, Form 4684, Form 6252, or Form 8824, but instead are separately reported on federal Schedule K, line 17d and in the Schedule K-1 statements. The gain or loss on the disposition of Section 179 assets is calculated from information entered in the federal
SalePT
 and
8824PT
 screens in the Income and activities folder, and
K1Sale
 and
8824
 screens in the K1 1065, 1041 folder.
The application reduces the basis of the asset by the amount of the Section 179 deduction when calculating the gain or loss. This amount is included on the Form 502, line 1.
A
Not Required
 statement prints detailing this amount. Use the
Force
 field to replace the calculated amount. If
0
 (zero) is entered, no adjustment is made.
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