Q&A with the Pennsylvania Department of Revenue

Scenario: A federal bonus depreciation adjustment was partially disallowed for a prior year during an IRS audit of a corporation

Dec 13, 2016
Q:

A federal bonus depreciation adjustment was partially disallowed for a prior year during an IRS audit of a corporation. The corporation had to add the partially disallowed bonus depreciation back through an IRC sec. 481 adjustment on its 2015 federal return. Should adjustments of the PA bonus modifications resulting from the IRS disallowance also be reflected on the current year RCT-101 or a RCT-128C?  How should they be reported so as to not trigger an adjustment on desk review?

A:

This is a change to federal taxable income which is result of an audit.  The change would be reported on RCT-128.  When filing the Report of Change, you must include an explanation of the change and a reconciliation of the changes reported to the taxable income on the RCT-128 and the income adjusted by the IRS.

Leave a comment

Watch: 2019 Q&A with the DOR
Watch: 2019 Q&A with the DOR

Watch Now

A PICPA member login is required to access this content. A full transcript is also available.

Full Transcripts:
Annual Meetings
     
Oct. 2019      Oct. 2018

Oct. 2017      Oct. 2016

  Sept. 2015     Sept. 2014

Full Transcripts:
Quarterly Meetings
Disclaimer

These documents provide a summary of the answers provided by the Department of Revenue to the PICPA Committee on State Taxation at its annual question and answer session. These documents are classified as revenue information issued for informational purposes only for the convenience of PICPA members. Pursuant to 61 Pa. Code Section 3.4, these documents should not be relied upon for any purpose or used in tax appeals. Taxpayers requiring a binding opinion on their specific fact situation may request a written letter ruling under 61 Pa. Code Section 3.3.