Restrictions for selecting assets for a mass disposition

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When entering a mass disposition, note the following restrictions for selecting assets.

  • Only like-kind assets should be grouped together as a mass asset disposition. For example, section 1245 property should only be grouped with other section 1245 property. If different types of property are grouped together in a mass asset disposition, the application uses the treatment assigned to the lowest asset number in the first group of the first business activity in the mass disposition as the treatment for the entire mass disposition.
  • Long-term assets should only be grouped with other long-term assets and short-term assets should only be grouped with other short-term assets.
  • Land assets should only be included in mass dispositions that contain other land assets. Including land assets with depreciable assets in a mass disposition results in incorrect disposal information.
  • Standard mileage assets should only be included in mass dispositions that contain other standard mileage assets.
  • For each treatment that follows IRS Notice 2000-4 or Reg. 1.168(i)-6, the replacement asset must calculate using either a MACRS or a non-MACRS method of depreciation throughout each component so the application can set up the aggregate asset correctly. For example, in a mass trade you should not trade together an asset with a Tax treatment that depreciates using the MACRS method and an asset with a Tax treatment that depreciates using the Units of Production method.
  • When the option is checked to include assets with Section 179 in the disposition and the assets have Section 179 claimed at the federal but not for a state, the assets should not be included in the mass disposition. 
  • Qualified real property assets with Section 179 should not be grouped with non-qualified real property assets that have taken Section 179.
  • Investment credit recapture and Hawaii excise tax credit recapture does not calculate automatically for assets sold in a mass disposition. To calculate the credit recapture for assets that qualify, open the asset and choose Tasks > Investment Credit Recapture or Tasks > Hawaii Excise Tax Credit Recapture. Once the recapture has been calculated, the mass disposition needs to be recalculated. To do this, choose Tasks > Mass Dispositions, select the appropriate mass disposition, click the Edit button, and then click the Enter Disposal Information button.
  • Assets that have a business use percentage of less than 100% should only be grouped with assets that have the same business use percentage.

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