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Options > Calculation tab
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Use this tab to customize depreciation calculation options for the open client. The options you set apply to the open client only.
To open this tab, choose Setup and then Options in the Asset List window, and then select the Calculation tab. (Note that this tab is not available in the Setup and then Options dialog when accessed through the Asset Detail dialog.)
note
Changing the period treatment after data has already been entered for the client could cause inconsistencies in the data. Therefore, if you change the period treatment, you must force the application to recalculate the depreciation for all of the client's assets. (In the Asset List window, choose Tasks and then Calculate All Assets.)
Fields & buttons
Non-ACRS/MACRS calculation options group box
Acquisition / disposal treatment
Select one of the following options from the drop-down list to determine the current depreciation for a non-ACRS/MACRS asset.
- Based on months held in year of transaction:Select this option to determine the current depreciation based on the number of months held in the year of transaction for a non-ACRS/MACRS asset.
- If the acquired date is in the first 15 days of the month, the application uses a full month for the month of transaction.
- If the acquired date is in the last 15 days of the month, the application calculates from the following month.
- Half-year of depreciation in year of transaction:Select this option to calculate depreciation based on a half-year's depreciation in the year of transaction for a non-ACRS/MACRS asset.
- Full year/no depreciation based on transaction date:Select this option to calculate depreciation by either using a full year's depreciation or no depreciation at all in the year of transaction for a non-ACRS/MACRS asset. If the transaction happens in the first six months of the year, the application calculates a full year's depreciation. If the transaction occurs in the last six months of the year, the application calculates zero depreciation for that year.
note
For assets that aren't depreciating with an ACRS or MACRS method, the holding period won't include the month the asset was placed in service, if it was placed in service after the 15th of the month. However, the monthly depreciation calculation will include the month the asset was placed in service.
For example, a straight-line asset placed in service on 31 January will show an 11-month holding period, but the monthly depreciation calculation will divide the total depreciation for the year by 12 months.
To view the current depreciation calculation for an asset, open the asset detail and select
Tasks
, then Display Calculation
. In the Tax
tab, you can find:- The months the asset was held in the Holding Period pane.
- The total yearly depreciation and the monthly depreciation (total depreciation divided by 12) in the Depreciation Pane.
Continue declining-balance with no switch to straight-line
The application automatically switches to straight-line method when advantageous. Mark this checkbox to turn this feature off and continue using the declining-balance method.
note
Marking this checkbox has no effect on depreciation being calculated under MACRS/ACRS assets.
ACRS/MACRS calculation options group box
Limit depreciation to asset life
Mark this checkbox to limit depreciation for an ACRS/MACRS asset to its depreciable life.
note
Regardless of whether this checkbox is marked, the application does
not
limit MACRS/ACRS assets for a short-year client or if the asset is a luxury auto.MACRS accelerated method: Tables vs. Formula
For the MACRS accelerated method, you can use either the IRS tables or the formula from the Internal Revenue Code. The default is to use the formula in all calculations.
Calculation results based on the tables (which are rounded percentages) may be slightly different from those based on the IRC formula.
MACRS straight-line method: Cost vs. NBV
For the MACRS straight-line method, you can use a fixed rate applied to the cost or you can base the depreciation on the asset's remaining life applied to the net book value.
Calculation results for both methods should be the same, assuming that they are properly applied each year since the asset's purchase.
ACRS optional straight-line personal: Tables vs. Formula
To calculate straight-line depreciation for the ACRS personal assets, you can use either the IRS tables or the formula from the Internal Revenue Code. The default is to use the formula in all calculations.
Calculation results based on the tables (which are rounded percentages) may be slightly different from those based on the IRC formula.
ACRS optional straight-line real: Tables vs. Formula
To calculate straight-line depreciation for the ACRS real assets, you can use either the IRS tables or the formula from the Internal Revenue Code. The default is to use the formula in all calculations.
Calculation results based on the tables (which are rounded percentages) may be slightly different from those based on the IRC formula.
Bonus Depreciation Elections button
Select this button to open the Bonus Depreciation Elections dialog, where you can choose which asset classes are electing out of the bonus depreciation per IRS Code section 168(k), 168(n), or 1400N by tax year.
Apply separate passenger auto limits when electing out of Reg. 1.168(I)-6
Mark this checkbox to apply separate passenger auto limits when electing out of Reg. 1.168(I)-6. This setting applies only to like-kind exchanges that are entered after marking this checkbox.
Include depr. from original exchanged asset when calculating the disposition
Mark this checkbox to include depreciation from the original exchanged asset when calculating the disposition.
Located in the GO Zone
Mark this checkbox if the client's assets are located in the GO Zone.
Calculate vehicle depreciation limits per Rev. Proc. 2011-26
Mark this checkbox to calculate vehicle depreciation limits per Rev. Proc. 2011-26.
Use component assets instead of aggregate assets for business income deduction
Mark this checkbox to use the component asset's date in service and cost basis for the business income deduction. If this option is not marked then the aggregate asset's date in service and cost basis will be used for the qualified business income deduction.
When you mark this option then a QBI button will be available when you edit each component asset. This button allows you to mark the component asset as excluded from the qualified business income deduction, or to enter a value in the
Basis for business income Ded (force)
field if you choose.Located in a Disaster Area
Mark this checkbox if the client's assets are located in a Disaster Area.
Date of applicable Federal Disaster
Select the Available Dates button to enter an applicable date in this field.
Available Dates button
Select this button to open the Select Applicable Federal Disaster dialog, where you can select an applicable Federal Disaster Area to enter the applicable date in the
Date of applicable Federal Disaster
field.