Hello Nitish,

$18,166 is the amount you would get if a Property Type A asset were placed in service in a 10-month short year.

Go to File, Edit Company and on the Short Years tab you should see something there to indicate the asset is placed in service is a short year.

~Delray

Hey Delray,

Thanks for your response. 

Yes, you are correct this is a 10 month Short period return for which we are calculating. 
But I would like to know how did FAS arrive at $18,166 instead of $20,200. 
I initially assumed if it was pro-rated and also did few manual calcs but could not arrive at $18,166.

Could you please help on me the calculation for how FAS arrived at $18,166 for this 10 month short year instead of $20,200?

Yes, that gets confusing because that $20,200 limit is the Auto limit+168. the 168 is fixed at $8,000 and is not prorated for a short year.

The calculated auto limit is $12,200, which is prorated for the short year (0.833333) and then the $8,000 is added back on: (12,200 * .833333) + 8,000 = 18,166.67

See How Property Type A or T is calculated with 168 Allowance which is an article we keep updated for property type A calculations.

~Delray

That was a great insight and gives me the solution. Thank you for your time, Appreciate it.

That was a great insight and gives me the solution. Thank you for your time, Appreciate it.