placed in service date and life mismatch

SOLVED

Hello! If I put a placed in service date of 2005 but I only want it to depreciate over 5 years will sage know to depreciate based off of the useful life column rather than the placed in service date?

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  • 0
    SUGGESTED

    Hello Nicole,

    The calculation of depreciation is based off several factors, principle among them is the Placed-in Service date and Estimated Life. The Life calculation always starts from the Placed-in Service date so yes, if you place an asset in service in 2005 with a 5-year life then running depreciation to any date after 2010, depending on the other factors presented by the Property type and Depreciation Method or any of the other fields in the Book Information, it will be fully depreciated.

    (Yes, I know, I could have just said “yes” but that’s not really me.)

    ~Delray

  • 0 in reply to Delray

    So to clarify, what I'm trying to do is move buildings into SAGE that have historically been tracked in an excel file. So would I be better off either using 2023 as their placed in service date with their current NBV or using the real placed in service date, with their 50 year useful life, and somehow input already calculated depreciation?

  • 0 in reply to Nicole Malzone
    SUGGESTED

    If you are not worried about the Tax reports, either way is fine.

    But for tax, now we are talking about a Property Type R and for the Tax book that usually means MF100 or MA100 and a 39-year or 15-year life if you placed in service in 2023. Since the tax rules were very different 45 years ago, the Tax book could original PIS date and value, but then you could still enter the asset using the NBV in 2023 with a Method of RM and get the correct calculation, it is just that Property Type R may reflect oddly on some of the tax reports since it is not really a new asset.

    ~Delray

  • 0 in reply to Delray

    Hi Delray, Sorry to have so many questions, I really appreciate your help. I'm now thinking, we typically do SH (straight-line half year convention) for depreciation method but if I do this for these assets that aren't new, I will still get half year depreciation this year right - Is there a way to force it to not do that and do regular full year depreciation this year but still get half depreciation in the final year? - Nicole

  • +1 in reply to Nicole Malzone
    verified answer

    Hello Nicole,

    Ok, I assuming this is going to be the Internal book, not the Tax book, which would make my answer: Don’t use SH after changing the PIS date into 2023. If the PIS date is going to be 1/1/2023, using SF, SL or RV would give you the result you are asking for.

    ~Delray

  • 0 in reply to Delray

    Thank you! Yes it is internal not tax.

  • 0 in reply to Nicole Malzone

    Good Morning. I'm still trying to upload these buildings and have unfortunately hit another road block. It is telling me property type "D" is invalid. This is usually what I use when uploading assets so I'm not sure what else it is looking for. I should note that I created a new company for buildings and when I upload I'm trying to use "Internal" books because "Financial;" is not an option which is what I use in my main company, maybe this could have to do with it? I looked through the SAGE depreciation fundamentals PDF but it unfortunately didn't include the possible property types. Thank you in advance!!!! - Nicole

  • 0 in reply to Nicole Malzone
    verified answer

    Hello Nicole,

    Then the question is, what is the Company type of the company you are importing into? if the Company type is a U.S. company, then Property Type D would be invalid since Property Type D would only be valid of Importing into a Gov/NP or Canadian company types.

    If you open the company then go to File and Edit Company and have 7 or more books available there, then the company type will be a U.S. Company where all those Tax rules I have mentioned before come into play.

    If it is you intention to setup a Gov/NP or Canadian Organization, then you probably need to create a new company with the correct Type selected.

    ~Delray

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