Entering disposal information

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Use the following steps to enter and update disposal information for a single asset. This information enables the application to properly calculate current-year depreciation and delete the asset after this year, when applicable.

Notes

  • To dispose of two or more assets in a single transaction, create a mass disposition.
  • If you are integrating with UltraTax CS, data automatically transfers to the appropriate form in UltraTax CS for any asset that is disposed through a sale or a like-kind exchange.
  1. Open the desired client and, if necessary, click an activity folder.
  2. Select the asset you want to dispose of and click the Modify button.
  3. In the Asset Detail dialog, click the Disposal tab.
  4. Do one of the following tasks.
    • Click the Method/Life Wizard button button to the left of the Method field to open the Disposal Wizard. The wizard guides you through the disposal process and provides on-screen explanations of the fields and options.
    • Choose the appropriate method of disposal from the Method field. Fields appear in the Disposal tab that are appropriate for the chosen method of disposal.

    Notes

  5. The steps to finish entering the disposal information vary depending on the method of disposal you chose in the previous step. Click the asset's method of disposal to view information specific to that method. (Note that additional information is not available for the Out of Service and Retired methods of disposal.)

    Note: For details about all fields that are available for the Sold / Scrapped disposal method, see Sold / scrapped disposal method.)

    Form 4797

    From the Type of property field, select the type of property to determine where the sale is reported on Form 4797. To complete Form 4797, Part III, click the Form 4797 Part III Real Property button and complete the applicable information regarding section 1250, 1252, 1254, and 1255 assets.

    If you don't want the asset reported on Form 4797, select Not reported on Form 4797 from the Type of property field.

    If the assets were not used in trade or business, select Not used in trade or business from the Type of property field. 

    Current-year installment sales

    To enter information regarding current-year installment sales, including related party information, click the Installment Sale button and complete the applicable information.

    Income classification (990 clients only)

    To enter income classification information, click the Income Classification button. This button does not appear unless the client is a 990 client.

    Casualty / theft disposal information transfers to the return in UltraTax CS.

    Apply separate passenger auto limits when electing out of Reg. 1.168(i)-6

    To apply separate passenger auto limits when electing out of Reg. 1.168(i)-6, mark the Apply separate passenger auto limits when electing out of Reg. 1.168(i)-6 checkbox in the Setup > Options > Calculation tab before entering the trade. Note that this setting applies only to trades that are entered after the checkbox is marked.

    Related party exchange

    If this exchange was with a related party, click the Related Party button and enter the applicable related party information.

    Transfer of disposal information

    Like-kind exchange disposal information transfers to the return in UltraTax CS. However, you may need to enter additional information on Form 8824.

    Tax assumption

    See Like-kind exchanges for information on the assumptions the application makes regarding like-kind exchanges.

    Qualifies for sale of certain livestock adjustment (KS) (1040, 1065, and 1120)

    Mark this option if the disposal qualifies for sale of certain livestock adjustments for Kansas.

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