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Depreciation
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This article applies to:

  • Product: ONESOURCE Income Tax
  • Subject: Depreciation

Depreciation options

Use this Organizer to select compute and print options for depreciation. The options selected on this Organizer apply to the entire return, not just to individual activities.
In Organizer, select
Income and deductions
Deductions
Depreciation and amortization
Depreciation options
.
You can select any of the options that apply:
  1. Select the option to transfer unadjusted federal depreciation to all state returns to ensure the depreciation transfers to all state returns.
    note
    This option prevents automatic state depreciation adjustments.
  2. The option to use the SL table rates for ACRS assets for tax preference computations on all ACRS assets.
  3. The option to calculate MACRS SL as the basis divided by remaining life. Select this option to use formulas, not IRS tables, to determine the basis.
  4. The option to compute book depreciation and amortization.
  5. The option to reduce the book basis for Section 179 expenses, special depreciation allowance, and investment tax credit.
  6. The option to include amortization expense when calculating the ACE and the ACE adjustment.
  7. The option to use formulas instead of the IRS tables.
  8. The option to suppress computation of special depreciation allowance.
  9. The option to retire all assets (depreciation and amortization).
  10. Enter the number of years for which you want to project depreciation. This entry will cause the system to project tax, AMT, ACE, and book depreciation for the number of years entered.
  11. The option to compute depreciation for short year terms, enter an override amount (if necessary) for the number of months to compute depreciation for short year returns.
note
MACRS property straight-line computations are calculated as depreciable cost/life. An entry in step 5 causes the system to consider accumulated depreciation when calculating the asset basis divided by the remaining life of the asset. A selection in step 3 applies to all assets. Use the lowest level data entry Organizer to select calculations for individual assets.

Print

  1. Go to
    Print Optons
    Print depreciation detail
    .
  2. Select the categories to print depreciation details according to the white paper categories on the asset detail Organizer.
    1. To suppress detail printing for specific portions of the white paper, select an option to
      Suppress white paper detail for
      .
    2. To suppress all depreciation detail printing, select the
      Suppress all depreciation detail print
       option.
  3. Select an option for
    Print See Depreciation Detail on:
    .
  4. Select an option for
    Print with Federal Return for States that do NOT adopt Special Depreciation
    .
  5. Enter the data for
    Section 168(k) Election
    .
  6. Enter the data for
    Section 195(b) Election
    .
    note
    There are 7 predetermined codes and 4 optional codes for printing white papers. The system automatically prints subtotals for each category when the white paper option is selected.

Select MACRS Convention override

For
MACRS Convention (override)
, select the override method (if any) from each year's list. The application of the mid-quarter convention is automatically determined for each year of MACRS property. To override the automatic calculation, enter HY or MQ for the proper year. The convention can also be overridden on a per asset basis. On the lowest level asset detail Organizer, or by class on the summary overrides Organizer.

Enter AMT default life override amounts

  1. For
    AMT Default Life Overrides
    , enter the override amount for each property type.
  2. Override the MACRS property for all returns on the
    General Information
     Organizer.
  3. These entries override the AMT lives on all applicable MACRS property for this return only.

Reset or delete depreciation

  1. Under
    Reset General Depreciation
    , use the button to reset the general depreciation folder.
  2. Under the
    Delete all Depreciation
     section, use the button to delete all depreciation Organizer data.

Short-year MACRS calculations

IRS Publication 946 states “You cannot use the MACRS percentage tables to determine depreciation for a short tax year. If you have a short tax year after the tax year in which you began depreciating property, you must change the way you figure depreciation for that property. If you were using the percentage tables, you can no longer use them. You must figure depreciation for the short tax year and each later tax year as explained.”
Refer to About Publication 946 for guidance on how depreciation deductions for a short tax year and tax years following a short year must be computed. GoSystem Tax calculates depreciation in accordance with these IRS Publication 946 rules. If you need to override a depreciation deduction to adjust the program's calculation, we recommend doing so carefully, as it may affect the accuracy of your results.
  1. Go to
    Organizer
    General Information
    Return & Print Options
    Depreciation Options tab
    .
  2. Enter the
    Number of years to project depreciation
     (1 - 6 yrs available).

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