K-1 (Post 1986 Depreciation Adjustment)

Tax, Legal Issues, Contracts, Self-Directed IRA 2 Replies

ok, my obsessive compulsive nature has ran it's course and I just cannot figure out on my own what the amount on my Form 1120S K-1 Line 15 represents. It has a code A and has something to do with depreciation and AMT limits ...

If anyone can shed some light on what the heck this is for, I would great appreciate it.

BMR

ok, since i know you were all dying to know, i found out a little more.

Evidently S-Corp rental property depreciation is figured differently for AMT calculations. The code of A is used to distinguish the difference between the regular depreciation amount and the AMT depreciation amounts.

BMR

Actually it is not only for S-corporations. That is just the line on the K-1 that they put the AMT Depreciation adjustment on. For P'ships, it is line 17A.

There are several different depreciation amounts for all property, not just rental property. There is Book (for GAAP), Tax, Alternative Minimum Tax (AMT), Adjusted Current Earnings (ACE, now same as AMT), Earnings & Profits (E&P) and State (some states allow bonus depreciation, some don't, so you will have a fed and state tax depreciation difference also.)

When I worked on large REITs, we had schedules for every one of these different depreciation rules. The only ones that apply to individuals will be Fed Tax, AMT & state tax.

Joe