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Fixed Assets and UltraTax CS 2023 help is now on Help and Support. We're still moving articles, but you can find most content for the 2023 tax year there. Continue using the Help & How-To Center for tax years 2022 and older.
Click any of the following links for information on MACRS/ACRS tax assumptions.
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. Also, if YTD depreciation is incorrect for monthly or quarterly periods, the application calculates an adjusted current-period depreciation so that YTD plus current depreciation yields the correct ending amount through the end of the current period. The current-period depreciation could be a negative amount in that case.
If you do not want to depreciate MACRS/ACRS assets beyond their asset lives, the Setup > Options > Calculation tab provides an option to limit the depreciation automatically. Two situations exist where the application does not limit MACRS/ACRS assets even if you select automatic limitation: (1) when a client has a short year, and (2) when an asset is a luxury auto.
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