A taxpayer expenses out $$150,000$ of tangible property under IRC Section $179$ when they file their Federal return.

The taxpayer will need to apportion the Section $179$ between California source and non$-$California source property and adjust as needed.

California limits Section $179$ deductions to a total of $$25,000,$ which would necessitate an add$-$back and then recalculating the assets under a depreciation method appropriate to California tax law.

California forbids Section $179$ deductions entirely, which would necessitate an add$-$back and then recalculating the assets under a depreciation method appropriate to California tax law.

 

What effect does this have on the California return?

 

Answer rating: 100% (QA)

The given scenario describes a situation where a taxpayer has expensed out 150000 of tangible proper... View the full answer