Abby Normal Posted March 16, 2014 Report Share Posted March 16, 2014 I don't see a place on the Sch E (other than the address) or in fixed assets to designate which state the rental is in. The problem is the tax classification report says Maryland and I need it to say Pennsylvania. Thanks! Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 16, 2014 Report Share Posted March 16, 2014 OK, let me see if I'm understanding the problem. You are looking at the 4562, the tax classification report, and it shows the t/p resident state,Maryland, right? But you also need to file a NR Pennsylvania return reporting the Pennsylvania rental income. Do I have that right? Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 16, 2014 Report Share Posted March 16, 2014 If that is right, unless you actually need to change something because Pennsylvania taxes it differently, you do not need to do anything, because the Sch E has the Pennsylvania address on it, If on the other hand, Pennsylvania does, for instance, have different depreciation rules, then I'd "duplicate" the return, and on the duplicate, change the t/p address to Pennsylvania, which will then let you print the tax classification report, showing PA as the state, with that state's rules applied. You can then use that for the NR Pennsylvania return reporting the Pennsylvania rental income. Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted March 16, 2014 Author Report Share Posted March 16, 2014 OK, let me see if I'm understanding the problem. You are looking at the 4562, the tax classification report, and it shows the t/p resident state,Maryland, right? But you also need to file a NR Pennsylvania return reporting the Pennsylvania rental income. Do I have that right? Yes. Actually I just need the PA one because all depreciable assets are in PA. Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted March 16, 2014 Author Report Share Posted March 16, 2014 Let me get this straight. If I have a client with rentals in 4 different states, ATX is going to just give me one state Tax Classification report for the home state? Wow. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 16, 2014 Report Share Posted March 16, 2014 In most states, the state calculation is the same as the federal one. CA being the most major one I've dealt with. I'm not sure, but the FAM program I think can deal with multiple state depreciation. In most cases you just add the other state's NR form to the return, and there is a form in most where you make any adjustments from the federal. Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted March 16, 2014 Author Report Share Posted March 16, 2014 Thanks! This reminds of the Intuit approach where you make the basic product deliberately flawed but offer you an addon that does things right. Many states have decoupled from the federal over 179 and bonus depreciation. I haven't seen any states lately that accept federal depreciation. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 16, 2014 Report Share Posted March 16, 2014 Well, when they don't, they normally have a form that you input the changes, and in most cases, it fills automatically when you go to that form. Quote Link to comment Share on other sites More sharing options...
jklcpa Posted March 16, 2014 Report Share Posted March 16, 2014 KC is correct. Add the PA return to the client's return and then you will have to exclude the items that aren't taxable in PA. Assbackwards PA is! I'm thankful that DE is one of the states that piggybacks the federal laws for depreciation. 1 Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted March 16, 2014 Author Report Share Posted March 16, 2014 KC is correct. Add the PA return to the client's return and then you will have to exclude the items that aren't taxable in PA. Assbackwards PA is! I'm thankful that DE is one of the states that piggybacks the federal laws for depreciation. I already the PA return added. I was just expecting the state depreciation schedule to say PA and not MD. Even TaxWorks had that right! I'll just edit the PDF to say PA. PA returns are a pain in the ass! I have a PA CPA contact I can email, thankfully. MD used to follow federal law exactly until the Bush tax cuts were going to blow up the state budget so they decoupled. With bonus gone (for good I hope) the only diff will be 179 over 25K and that doesn't happen much. Quote Link to comment Share on other sites More sharing options...
Pacun Posted March 16, 2014 Report Share Posted March 16, 2014 MD used to follow federal law exactly until the Bush tax cuts were going to blow up the state budget so they decoupled. With bonus gone (for good I hope) the only diff will be 179 over 25K and that doesn't happen much. What was going to blow up the economy in MD is that fact that they were or are giving EIC credit to people with fake social security numbers. This is how they are getting this EIC from MD, they file as Jose Juarez with social 578133443 who happens to have a W-2 for 12K and claim 3 dependents, MD used to just send refunds. I still believe they are doing it. Of course these returns are paper filed. I remember before 1990 when the IRS didn't require SS number for dependents. Everybody was claiming 2 dependents who were enjoying the beaches in Central and South America and other nice places. Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted March 16, 2014 Author Report Share Posted March 16, 2014 What was going to blow up the economy in MD is that fact that they were or are giving EIC credit to people with fake social security numbers. This is how they are getting this EIC from MD, they file as Jose Juarez with social 578133443 who happens to have a W-2 for 12K and claim 3 dependents, MD used to just send refunds. I still believe they are doing it. Of course these returns are paper filed. I remember before 1990 when the IRS didn't require SS number for dependents. Everybody was claiming 2 dependents who were enjoying the beaches in Central and South America and other nice places. No. A few fraudulent people have nowhere near the impact of thousands of MD business deducting, millions in depreciation in one year as opposed to spreading it over 5 years. MD was just trying to responsibly smooth out their revenues. Quote Link to comment Share on other sites More sharing options...
Richcpaman Posted March 16, 2014 Report Share Posted March 16, 2014 No. A few fraudulent people have nowhere near the impact of thousands of MD business deducting, millions in depreciation in one year as opposed to spreading it over 5 years. MD was just trying to responsibly smooth out their revenues. Just had a large Farm operation 1120 tax return.... $450k in equipment new in 2012, take 100% deprec/179/bonus/etc on fed and get taxable income below 25k. But have and add back of $250k on the MD return. Ok, big tax $ to MD. Go to the next year.... Not much federal deprec to take, but have a large deduction on the MD return. But no income to offset nor carryforward or carry back options. It really sucks. Rich Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted March 16, 2014 Author Report Share Posted March 16, 2014 Some ATX insider replied on the official ATX form: jmdaviscpa, You can change the state by doing the following: Go to Fixed Assets/Asset Global Settings/State Calcs then select the State Situs from the drop down menu. Please note that if you have assets in multiple states only one state may be selected. So this will work in my case where the client only has assets in one state. Still screwed on any multi-state clients. Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted March 16, 2014 Author Report Share Posted March 16, 2014 Go to the next year.... Not much federal deprec to take, but have a large deduction on the MD return. But no income to offset nor carryforward or carry back options. It really sucks. Rich It should create a MD NOL to carryback/forward. Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted March 16, 2014 Author Report Share Posted March 16, 2014 One of the situations I hate with decoupling is when it's an S corp with no basis to deduct the loss and the software wants to have an add back on MD. If it was big enough, I'd override it and keep a cumulative schedule until there depreciation is actually deducted on the federal 1040. Problem would be if only part of the losses were allowed. Hopefully, most decoupling differences will go away in a few years and we won't be creating new ones. Quote Link to comment Share on other sites More sharing options...
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