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Morris: California, New York, and New Jersey decouple from federal bonus depreciation

Paul Mark Morris · PRO SECRET: How to Slash Your Tax Bill with Real Estate Tactics! · Aug 11, 2026 · at 12:01

Paul Mark Morris warns investors that state tax laws in California, New York, and New Jersey disallow federal bonus depreciation write-offs.

0:00 / 0:12exact quote · 12.3s

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“And in California, along with New York and New Jersey, they don't follow the federal rule, so that's a federal tax benefit only, which is significant, but you'll still have to pay state taxes in those particular states.”

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The claim, plainly

California, New York, and New Jersey do not conform to federal bonus depreciation rules, meaning taxpayers still owe state income taxes on the deducted amounts in those states.

a quote alone can be ambiguous, so this restates it with the references and context of the conversation around it resolved. AI-written; the tape below the player is the source.

Assessment

Statutory tax rules in California, New York, and New Jersey decouple from federal bonus depreciation under Internal Revenue Code Section 168(k). In California (R&TC §§ 17250 and 24349), New York (Tax Law Articles 22 and 9-A), and New Jersey (N.J.S.A. § 54:10A-4(k)(12) and § 54A:5-1 et seq.), taxpayers claiming federal bonus depreciation are required to add back the deduction on their state returns and calculate state depreciation under state-specific schedules, resulting in state taxable income on the deducted amounts.

California Franchise Tax Board guidance and R&TC §§ 17250/24349 confirm non-conformity with IRC § 168(k), requiring a state add-back/basis adjustment.
New York Department of Taxation and Finance forms (IT-225, IT-398, CT-399) require taxpayers to add back federal IRC § 168(k) bonus depreciation for both personal and corporate income taxes.
New Jersey Division of Taxation statutes (N.J.S.A. § 54:10A-4(k)(12) and § 54A:5-1) require decoupling from federal bonus depreciation under both Corporation Business Tax and Gross Income Tax.

Checked against

[1] aetaxadvisors.com [2] ca.gov [3] grantthornton.com [4] dnaccountingservices.com [5] costsegsmart.com [6] ny.gov [7] bloombergtax.com [8] nj.gov

New York state bonus depreciation IRC 168k conformity add back California bonus depreciation IRC 168k conformity add back state conformity federal bonus depreciation California New York New Jersey New Jersey bonus depreciation IRC 168k conformity CBT GIT add back

assessed as of 2026-09-03

This assessment is an AI reading of a public statement, made against the cited references with the confidence shown. It can be wrong. The quote, the tape and the references are all on this page; if something is off, use report an error below. full disclaimer →

Mentioned

bonus depreciation California New Jersey New York

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