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Asset Detail > Depreciation tab
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Use the Depreciation tab in the asset module's Asset Detail window to enter or edit detailed depreciation information for the selected asset.
To open this tab, select Add or Modify in the Asset List window then select the Depreciation tab in the Asset Detail window.
note
The application assumes that any date after 12/31/29 is in the 1900s and any date before 01/01/30 is in the 2000s.
Treatments
For a new client, the Tax, Book, AMT, and ACE (1120) columns appear in the Depreciation tab. (Note that the ACE column is not available for 1040 clients.)
- See Treatments that calculate by default for each entity type for more information.
- See Setting up treatments for details on making the E&P treatment and/or custom treatment columns available for data entry.
- By default, amounts you enter in the Tax column are automatically duplicated in the state column (except for section 179 expense). However, you can make changes in the state column if you need to enter special depreciation data for a state. See the following State-related information section to see if your state provides guidelines for entering depreciation data in this tab. (To change the default setting that causes the Tax column to be duplicated in the state column, select Setup, Treatments, select the state treatment, select Options, then Continue. Then, in the New Asset Defaults tab, clear the checkboxes for any amounts that should not default to the value that is entered for the Tax treatment.)
Fields and buttons
Edit Components
Select this to open the Components for Aggregate Asset window. In this window, you can edit, add, or delete a component asset or edit the aggregate asset.
note
This is available only for aggregate or component assets.
Treatment column headings
Select any treatment column heading (for example, Tax, Book, or AMT) to view how the current asset's depreciation was calculated for that treatment.
note
If the mid-quarter convention applies to an asset for a specific treatment, that treatment column heading is displayed in blue.
Cost / Basis
Enter the cost basis for the asset. For an asset with a negative basis, enter the amount then select the minus (-) key.
Method/Life Wizard
Select this to open the Method/Life Wizard, which provides a list of asset classes. Based on the class that you select and the asset's date placed in service, the Method/Life Wizard fills in the methods and lives for the asset.
note
Tip:
In the Asset Detail window, select F6 to open the Method/Life Wizard's list of asset classes.For more information, see Use the Method/Life Wizard during asset data entry.
Method
Select the method of depreciation from the dropdown list. This dropdown list displays the depreciation methods including old-law methods for all assets.
Life
Based on the method chosen, the lives for MACRS/ACRS assets are listed in the dropdown list. For old-law assets, no dropdown list is available; you'll need to enter the life directly in this box.
ADS Life
- For MACRS assets using the Alternative Depreciation System (ADS), enter the ADR midpoint life in this box.
- For ACRS SL assets using the optional straight line, enter the life in years in this box.
This life is used to calculate AMT, E&P, and ACE depreciation amounts.
Sec 179 Expense
For ACRS and MACRS assets, enter the section 179 amount expensed. The application notifies you if an asset causes the current maximum section 179 amount to be exceeded.
If you enter a section 179 expense for a luxury auto that exceeds the luxury auto depreciation limit, the section 179 expense amount is limited to the current year's luxury auto depreciation limit.
note
Tip:
Select F11 to have the application calculate and enter the maximum section 179 expense for the selected asset.Start-up/Org Exp
Enter the start-up or organizational amount expensed. The application notifies you if your entry in this box causes the client to exceed the maximum start-up or organizational amount.
note
The
Start-up/Org Exp
box is available for an asset only if one of the following asset classes was selected from the Method/Life Wizard for the asset.- Intangible asset (IRS Code Sec 195 - start-up expenses)
- Intangible asset (IRS Code Sec 248 - organizational expenses (1120, 990))
- Intangible asset (IRS Code Sec 709 - organizational expenses (1065 only))
PA IDC
Enter the Pennsylvania intangible drilling cost and development cost amount expensed. The application notifies you if your entry in this box causes the client to exceed the maximum intangible drilling or development cost.
note
The PA IDC box is available for an asset only if the following are true:
- Pennsylvania is added as a state treatment.
- The tax year begins after December 31, 2013.
- The asset was placed in service in 2014 or later.
- Intangible asset (IRS Code Sec 263 – Intangible Drilling Costs or Intangible asset (IRS Code Sec 59(e) – Intangible Drilling Costs has been selected.
Salvage Value
Enter the asset's salvage value, if any.
This box is available only when the following methods are used for depreciation: Straight Line, 125% DB, 150% DB, 200% DB, Amortization, or ACRS SL.
Credit/Amount
- From the dropdown list, select the credit code for assets purchased after 12/31/82, then enter a credit amount. If you do not enter a credit amount, the credit amount is automatically calculated for post-1982 assets based on the credit code you entered.
- For pre-1983 assets, enter the full amount of the credit taken on the asset.
- Credit codes C, S, G, and F are available for assets placed in service after 1998. The credit amount is automatically calculated for each credit code.
- Credit code R is available for assets placed in service after 1998 and before 2018. The credit amount is automatically calculated for each credit code.
- Credit code Q is available for assets placed in service after 1998 and before 2007.
- Credit code A is available for assets placed in service after 2005 and before 2021.
- Credit code N is available for assets placed in service after 2008.
- Credit code M for Form 8936 expired after 2021, but can still be taken if the vehicle was placed in service in 2022.
- Credit code V is available for assets placed in service after 2005 and before 2033.
- Credit code W is available for assets placed in service after 2008 and before 2012.
- Credit code P is available for assets placed in service after 2/17/09.
- Credit code L is available for assets placed in service after 2/17/09 and before 2014.
- Credit code I is available for Hawaii assets placed in service between 1/1/99 and 4/30/09 or after 2009. This code should be entered only in the HI treatment column.
- Credit code U is available for assets placed in service after 2018.
- Credit code Y is available for assets placed in service 2020.
Prior Depreciation
When you add an existing asset, enter the amount of the asset's accumulated depreciation or cost recovered.
This amount is automatically calculated if you select Tasks, then Prior Depreciation Comparison.
If section 179 expense or additional first-year depreciation was taken, include that amount in this box as well as in the
Sec 179 Expense
box.note
- The amount in this box is automatically updated whenever you close to a new fiscal year.
- You cannot enter an amount that is larger than the asset's basis.
Current Depreciation
Unless you want to force a depreciation amount, you do not need to enter an amount in this box. Whenever you close the Asset Detail window, the asset's depreciation for the current period is automatically calculated and displayed in this box. This box includes the section 179 and bonus depreciation expense amounts in the asset's first year.
Regardless of whether the correct depreciation was taken in prior years, the application still calculates the correct current depreciation according to the method you specify. However, if you select MACRS accelerated depreciation based on the formulas rather than IRS tables, the current depreciation depends on the amount of prior depreciation taken.
If incorrect depreciation was taken in a prior year, the application does
not
adjust the current depreciation so that the ending accumulated depreciation is correct.YTD Depreciation
This row of boxes appears only for quarterly or monthly clients created in Fixed Assets CS.
- When adding information for a newly purchased asset, leave this box blank.
- When adding information for an existing asset part way through the year for a monthly or quarterly client, enter the year-to-date accumulated depreciation amount through the end of the prior period.
Total Depreciation
This value, which is calculated by the application, shows the accumulated depreciation for the current asset.
Net Book Value
The net book value is automatically calculated. The application subtracts any prior depreciation and the current year's depreciation from the cost/basis and displays the amount in this box.