Federal Bonus Depreciation Subtraction

To qualify, both of the following must be true:

• You deducted bonus depreciation on your federal tax return in one or more of the five previous years.
• You added back 80 percent of that deduction on your Minnesota return in the same year.

Complete Schedule M1M, Income Tax Additions and Subtractions. Include Schedule M1M when filing Form M1, Individual Income Tax.

You may not take the remainder of the subtraction in the year of sale. Instead, you must continue with the five-year schedule.

Do not adjust your federal gain or loss on the disposition of the asset due to the Minnesota treatment of the bonus depreciation.

You may claim prorated subtractions of the predecessor’s remaining bonus depreciation subtractions.

For more information on this subtraction:

• See Minnesota Statute 290.0132, subdivision 9.
• See Minnesota Treatment of Federal Bonus Depreciation on the state legislature’s website.