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awestern

Bonus Depreciation - Help

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In need of any help or suggestions on how we change or track the below 2 changes in the system.

 

Issue 1: Recently any assets placed in service prior to 1/1/14, Federal and State were the same (in the system they are not) - Is there a way to have a catch up and change the methods?

Issue 2: When Congress extended bonus depreciation for Federal purposes retroactive back to 1/1/14, any asset placed in service during 2014 that you elect bonus for Federal purposes, Wisconsin does NOT follow this treatment. Therefore, there will then be a difference in depreciation and basis between Federal and WI for these particular assets. A tracking nightmare.

The issue is that we cannot use State Depreciation reports to determine State depreciation deduction because of the prior differences (issue 1) we had in depreciation and basis, but going forward, we need this report for differences in assets placed in service in 2014.



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    Hello awestern,

    Issue 2 is answered here: Depreciation: State Tax Conformity with Federal Tax Rules

    Issue 1 is a bit vague, and could be answered in a number of ways, but I believe you are looking to remove the 168 Allowance from your state book, which can be done, in-mass by Fiscal year, using the 168 Allowance Switch on the state book, electing “Do not to take the 168 Allowance”.

    How to change a group of assets:

    If all assets in a given Fiscal year need to be changed: Go to Step 2. Otherwise, Create a group containing only the assets to be changed:

    Highlight assets in Asset List.

    NOTE: There are limits on creating a group this way.

    Go to: Asset, Save as Group, give the group a Name, click OK.

    Go to: Depreciation, 168(k) Allowance Switch.

    Select the Group, Select the Book(s).

    Enter the Fiscal Year end the assets to be changed were Placed-in Service.

    NOTE: The 168(k) Allowance switch is a mass change of the Depreciation Method and will only change assets Placed in Service in one Fiscal year at a time which is Personal Property(P), using a MACRS depreciation method (MA), and has not been Disposed or Transferred.

    Select Do not take 168(k) Allowance, Click Execute.

  • 0

    Thank you Delray! You answered perfectly. I would actually be looking to add 168 Allowance to our state book; I would imagine I could do that the same way as noted above.

    The question I have is if I do this to 2013 will all my reports correct themselves to reflect this change? As of right now my reports are incorrect given the recent changes for 168.

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    The 168 Allowance switch just changes the Depreciation method of the qualifying assets to a 168 method. After running the switch, you will need to re-run depreciation on those assets, using the Force Recalculate option, to get the 168 amount to appear on reports correctly.

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