Asset Detail > Depreciation tab

Alerts and notices
Leave feedback

Internal Employees: Submit feedback

Contact information (optional):

Leave this blank:

Please tell us how we can make this information more helpful.


Characters left:

Use the Depreciation tab in the Asset Detail dialog to enter or edit detailed depreciation information for the selected asset.

To open this tab, click the Add or Modify button in the Asset List window and then click the Depreciation tab in the Asset Detail dialog.

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.)

Fields & buttons

Click this button to open the Components for Aggregate Asset dialog. In this dialog, you can edit, add, or delete a component asset or edit the aggregate asset.

Note: This button is available only for aggregate or component assets.

Click 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.

Enter the cost basis for the asset. For an asset with a negative basis, enter the amount and then press the minus (-) key.

Click this button to open the Method/Life Wizard, which provides a list of asset classes. Based on the class that you choose and the asset's date placed in service, the Method/Life Wizard fills in the methods and lives for the asset.

Tip: In the Asset Detail dialog, press F6 to open the Method/Life Wizard's list of asset classes.

For more information, see Overview of the Method/Life Wizard.

Select the method of depreciation from the drop-down list. This drop-down list displays the allowable depreciation methods including old-law methods for all assets.

Based on the method chosen, the allowable lives for MACRS/ACRS assets are listed in the drop-down list. For old-law assets, no drop-down list is available; you must enter the life directly in this field.

  • For MACRS assets using the Alternative Depreciation System (ADS), enter the ADR midpoint life in this field.
  • For ACRS SL assets using the optional straight line, enter the life in years in this field.

This life is used to calculate AMT, E&P, and ACE depreciation amounts where applicable.

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.

Tip: Press F11 to have the application calculate and enter the maximum section 179 expense allowed for the selected asset.

Enter the start-up or organizational amount expensed. The application notifies you if your entry in this field causes the client to exceed the maximum start-up or organizational amount allowed.

Note: The Start-up/Org Exp field 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))

Enter the Pennsylvania intangible drilling cost and development cost amount expensed. The application notifies you if your entry in this field causes the client to exceed the maximum intangible drilling or development cost allowed.

Note: The PA IDC field 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.

Enter the asset's salvage value, if any.

Note: This field is available only when the following methods are used for depreciation: Straight Line, 125% DB, 150% DB, 200% DB, Amortization, or ACRS SL.

  • From the drop-down 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 R, 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 Q is available for assets placed in service after 1998 and before 2007.
  • Credit codes V and A are available for assets placed in service after 2005.
  • Credit code N is available for assets placed in service after 2008.
  • 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.

Leave this field blank when adding newly purchased assets. When adding an existing asset, enter the amount of the asset's accumulated depreciation or cost recovered.

This amount is automatically calculated if you choose Tasks > Prior Depreciation Comparison.

If section 179 expense or additional first-year depreciation was taken, include that amount in this field as well as in the Sec 179 Expense field.

Notes

  • The amount in this field is automatically updated whenever you close to a new fiscal year.
  • You cannot enter an amount that is larger than the asset's basis.

Unless you want to force a depreciation amount, you do not need to enter an amount in this field. Whenever you exit the Asset Detail dialog, the asset's applicable depreciation for the current period is automatically calculated and displayed in this field. This field 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.

This row of fields appears only for quarterly or monthly clients.

  • When adding information for a newly purchased asset, leave this field 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.

This value, which is calculated by the application, shows the accumulated depreciation for the current asset.

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 field.

Share This