Asset Manager

Asset Manager Training

Session Topic• Introduction• Asset Tree and Management• Asset Detail Tabs• Asset Button Bar • Asset Tips and Tricks• Asset Questions and Answers

Approx. time

5 minutes

5 minutes

45 minutes

10 minutes

5 minutes

5 minutes

Asset Tree

• The Tree displays all assets and all forms containing assets

• Click the + icon to expand a form and display its assets in the tree

• Click on an asset to move to that asset and display the entry tabs

• Click on a form to see Asset Management (details on all assets for that form)

• Right click allows for many options

• Highlight indicates disposed assets

Asset Management

Asset Management• Sort assets by any column in ascending or descending

order (just click on the column header)• View totals for all assets or the current form• Double click on an asset to see that asset’s details• Tag all assets by clicking on the header in the tag

column• Click the Options button to select additional columns

to display or hide• Renumber assets by clicking on the Renumber button• Restore deleted assets by clicking the Recycle button• Delete assets by tagging one or more and clicking the

Delete button• Move assets by tagging one or more, clicking the

Move button, and assigning the new form information• Close the Asset Manager by clicking the Close button

Asset Detail Tabs• There are six detail input tabs: General,

Vehicle, Disposition, Florida, Michigan, and Other

• Calculated values appear in blue in shaded boxes

• Press F1 on any field to get field specific help

General Tab

• The General tab shows specific information about the asset

• It shows Federal and Alternative Minimum Tax Depreciation side by side

• Click the button to access state calculations• Allows for additional information about the asset

– Additional description detail– Alternate description (longer for reports)– Force options– Amortization information

• Enter a functional category, location, account code, and/or division code for report grouping options

General Tab

State Details• Use this screen to make

adjustments between state and federal depreciation rules

• Special depreciation is automatic

• Uncheck the box that says “State depreciation is the same as federal depreciation except for Federal Special Depreciation Allowance” to adjust 179 or make other adjustments

• Each state listed in the return that is not conforming to federal rules can be adjusted and will have a depreciation schedule and adjustments made on the appropriate form or schedule

Changes to Special Depreciation Allowance

• Generally not available for assets placed in service on or after January 1, 2005

• Exceptions are:– Long production period property and

transportation property– Non-commercial aircraft– Must be placed in service by 12/31/2005

• Use force option to calculate special depreciation allowance

New York Liberty Zone Benefits

• The Liberty Zone is the area located on or south of Canal Street, East Broadway (east of its intersection with Canal Street), or Grand Street (east of its intersection with East Broadway) in the Borough of Manhattan in the City of New York, New York.

• 30% Special depreciation allowance• Increased 179 deduction• Leasehold improvement property is classified

as 5-year property

Qualified Liberty Zone Property

• Property placed in service after January 1, 2005 that otherwise would have qualified for the special depreciation allowance

• Used property depreciated under the modified accelerated cost recovery system (MACRS) with a recovery period of 20 years or less

• Used water utility property which is either– Property that is an integral part of the gathering, treatment, or

commercial distribution of water– Any municipal sewer

• Used computer software that is readily available for purchase by the general public, is subject to a nonexclusive license, and has not been substantially modified

• Certain nonresidential real property and residential rental property– Rehabilitates property damaged or replaces property destroyed by the

terrorist attacks of September 11, 2001– Real property is only considered destroyed (or condemned) if the

entire structure was destroyed (or condemned)• Meets the other tests

Liberty Zone Property Other Tests

• Acquisition date test

• Placed in service date test

• Substantial use test

• Original use test

• Exceptions

Liberty Zone Increased 179 Deduction

• Only 50% of the cost (instead of 100%) is used when figuring the reduced dollar limit for costs exceeding $420,000

• $105,000 dollar limit is increased for qualified property to the smaller of– $35,000– The cost of section 179 property that is qualified

property

• Qualified property– Qualified Liberty Zone property– Property that would be qualified Liberty Zone

property except that it is eligible for the special depreciation allowance

Liberty Zone Leasehold Improvement Property

• Classified as 5-year property• Must use straight-line depreciation• Under ADS the recovery period is 9 years• Qualified improvements:

– In a nonresidential building in the Liberty Zone– Placed in service after September 10, 2001 and before January

1, 2007– No written binding contract effective prior to September 11,

2001– Improvement is made under or pursuant to a lease by the

lessee (sublessee) or the lessor of that part of the building– That part of the building is to be occupied exclusively by the

lessee (sublessee)– The improvement is placed in service more than 3 years after

the building was first placed in service– Some exceptions (can’t be to a common area, not an

elevator/escalator, or enlargement of the building)

Vehicle Tab

Vehicle Tab• The Vehicle tab gathers additional information about automobiles• Added detail for odometer beginning and ending mileage• Enter any business mileage, commuting mileage, and other

mileage– In an individual return,

click the Detail button(with the pin)

– Enter medical mileagefor this vehicle

– Enter charitable mileagefor this vehicle

– The totals for all vehicleswill carry to Form 1040 Schedule A

– The business use percent is automatically calculated based on the mileage entries

• Current year depreciation allowance for Standard Mileage Rate (SMR) will calculate based on business mileage

• Prior year depreciation allowance for SMR can be entered (it will update from year to year)

Vehicle Tab• Enter any necessary vehicle expense• Click the Detail button next to Other to enter additional information

– Property tax– Licensing fees– Registration fees– Insurance– Other expenses– If the property tax is an

ad valorem tax, check the box to carry the nonbusinesspercentage to the Schedule A

• In the first year an auto is placed in service in a 1040 return, the Asset Manager will optimize between SMR and actual automobile expenses

• Standard Mileage Rate is not allowed on business returns• If the automobile is exempt from the luxury automobile limitations on

depreciation, select the appropriate reason from the Options pick list• Answer automobile related questions on the Questions tab

Standard Mileage Rates

CATEGORY:Through August

After August

Business $0.405 $0.485

Charitable* $0.14 $0.14

Medical & Moving $0.15 $0.22

* Katrina related charitable miles

Time Period: Rate: Calculation:

08/25/2005 – 08/31/2005 $0.29 70% of $0.405 rounded up

09/01/2005 – 12/31/2005 $0.34 70% of $0.485 rounded up

Automobile LimitationsPassenger Autos

Placed In Service During Calendar Year 2005

Tax YearPassenger

AutomobilesTrucks and

VansElectric Vehicles

1st Tax Year

$2,960 $3,260 $8,880

2nd Tax Year

$4,700 $5,200 $14,200

3rd Tax Year

$2,850 $3,150 $8,450

Each Succeeding

Year$1,675 $1,875 $5,125

Disposition Tab

Disposition Tab• Choose from various types of disposition

– Sale (Form 4797)– Installment Sale (Form 6252)– Like-Kind Exchange (Form 8824)– Casualty and Theft (Form 4684)– Charitable Contribution (Form 8283)

• Group dispositions available for sales and installment sales, like-kind exchanges, and casualties and thefts

• Partial dispositions available for sales and installment sales

• Tracks required depreciation recapture• All disposition forms are generated within the Asset

Manager (no additional entries are necessary in the return)

Group Sale

Group Sale• Choose the primary asset in the group• Click the Group button on the Disposition tab• Enter the group description• Enter the type of disposition (sale)• Enter the disposition date• Enter the gross sales price• Enter any expenses associated with the sale• Select the part of Form 4797 to report the sale on (i.e. Part 3, Sec 1245)• Enter separate land information, if required• Tag the assets to include in the group

– The bold asset is the primary asset in the current group– The italicized assets are included in other groups– The date placed in service and cost columns have been added to help identify

the asset– If there are assets that are Section 1250 and Section 1245 property in the same

group, go to each asset in the carry to 4797 column and make the correct selection

• Click the OK button to save the group• Click the Remove Group button to remove a group sale• Click the Cancel button to return to the Sale tab without saving any

changes

Group Installment Sale

Group Installment Sale• Same as group sale

• Change type of disposition to installment sale

• Indicate amount of current year principal payments received

• Indicate amount of current year interest payments received

• Tag the assets to include in the group

• Click the OK button to save the group

Like-Kind Exchange Reg.• Temporary Regulation §1.168(i)-6T

• Effective for exchanges after Feb 27, 2004

• General Rule:– Exchanged basis (the basis in the replacement property that does not

exceed the basis in the relinquished property) is depreciated over the remaining recovery period of the relinquished property using the same MACRS depreciation method and convention as long as it has the same or a shorter recovery period or depreciation method

– The excess basis (boot) is depreciated using current MACRS rules

• No depreciation for time period between giving up the relinquished property and acquiring the replacement property

• An election out of the new rules is available, but the entire basis of the replacement property is depreciated as new property

Group Like-Kind Exchange

Group Like-Kind Exchange• Choose the primary asset in the group• Click the Group button on the Disposition tab• Enter the group description• Enter the type of disposition (like-kind exchange)• Enter the disposition date• Enter a description of the like-kind property received• Enter the date the received property was identified• Enter the date the property was actually received• Fill in other fields as required• Tag the assets to include in the group• Click the OK button to save the group• Note: The exchanged asset(s) will not be created. You

will have to manually add the new asset(s)

Group Casualty or Theft

Group Casualty or Theft• Choose the primary asset in the group• Click the Group button on the Disposition tab• Enter the group description• Enter the type of disposition (casualty/theft)• Enter the disposition date• Enter the classification• Tag the assets to include in the group• Indicate for each asset

– Any insurance or other reimbursements– The fair market value before the casualty– The fair market value after the casualty (if any)

• Click the OK button to save the group

Florida and Michigan Tabs• Florida Tab

– Used to generate Florida Tangible Tax return (Form 405-R)

– Enter the county and other key entries

– Age, year purchased, and original installed cost all carry from the General tab

• Michigan Tab– Generates Michigan C-8000ITC and C-8000D

– Enter the location and Michigan classifications

– Fill out the other information as required

Florida Tangible Tax• Prepare the header information on the Florida Form 405-R

• Open the Asset Manager

• Choose the asset to edit

• Click on the Florida tab

• Assign the county – Select from the pick list

– Start typing the county name

• Assign the location– Enter a number (1 – 99)

– Locations can be set up by using the Settings button

– Location number in settings (or as input) must correspond to location number entered on the 405-R input screen

• Assign the line number

• Enter the condition

Other Tab• Offers four additional options for

tracking depreciation• Uncheck the box to activate the column

and make necessary changes• ACE carries to 1120 returns• Book value will carry to the balance

sheet and M-1 on the business returns• Use the Other and What-If columns for

what-if scenarios• Access the state depreciation calculations

by clicking the pin button

Button Bar

• New Asset• Special Allowance• Calculator• Section 179

• Settings• Reports• Help• Close

New Asset• Allows for quick entry of asset

basics• Gathers the minimum amount

of data necessary to start depreciating an asset

• Expands as additional data is required

• Asset ID is optional and allows for alphanumeric entries

• Type is optional and allows for automatic assignment of the depreciation method

• Next button to quickly add the next asset

Special Allowance• Elect out of special

depreciation allowance• Elect 30% in lieu of

50% special allowance• Election is made for all

classes or on a class by class basis– 3 Year– 5 Year– 7 Year– 10 Year– 15 Year– 20 Year– Water Utility

Property– Depreciable

Computer Software– Qualified Leasehold

Improvement Property

Calculator• Access the TaxWorks

Calculator• Paste the value into any

numeric input field• The calculator can also be

accessed by hitting the plus key on the keyboard– It will take the number in the

current field and is then ready to add additional numbers to it

• Uncheck the box at the bottom if you do not want the results pasted into the program when you hit enter (equals)

Section 179• Display information

about any disallowed section 179 expense carryover

• Display a summary of section 179 expense reported on a K-1 from a partnership or S-corporation

• Override business income within the Asset Manager, if necessary

Settings• Enter functional category

information– Thirteen categories are pre-assigned– Add additional categories as needed– Applies to all clients

• Enter location information– Applies to current client only– Enter basic location information to

print on a report– Contact information available for

primary custodian• Enter account code information

– Applies to the current client only– Allows for a report to be grouped by

account• Enter division code information

– Applies to the current client only– Allows for a report to be grouped by division

• Sort any column in ascending/descending order by clicking on the column header

• Find in the current sort column by entering the text to search for in the Find box

• Insert or delete rows by clicking the appropriate button

Reports• Select which reports (depreciation

schedules) to print with the return• Preview the reports from the Asset

Manager (before printing them)• Disposition report gives detailed

breakout of group sales, sales, and installment sales

• Group reports by form or schedule, functional category, location, account code, or division code

• Sort each group by description, asset ID, or date placed in service

• Choose to break each group (section) onto a new page

• Print reports for Federal Depreciation, Alternative Minimum Tax Depreciation, State Depreciation, ACE Depreciation (1120 returns), Book Depreciation, Book Tax Difference, and Other Depreciation

• Print future reports for Federal, AMT, State, Book, and Other Depreciation• Print separate amortization schedules for assets that are amortized

Additional Report Options• Balance sheet

reconciliation– Defaulted to print on the

Federal depreciation and book depreciation schedules for the 1065, 1120, and 1120S

– Backs out any future purchases – Backs out any current year

dispositions– Should tie to the balance sheet

on page 4 of the tax return

• Subsection reports– Cannot be the same as the section– Year acquired– Form or Schedule– Type– Functional Category– Location– Account Code– Division Code

Help and Close• Help

– Feature helps for the Asset Manager

– Contains some examples and frequently asked questions

• Close– Close the Asset Manager

Tips and Tricks• Import assets from another return

• Export depreciation schedule to Excel

• When you delete a multiple in input mode, it will move the assets to the recycle bin and compress the remaining assets

• Use shift page up / shift page down to move through the assets in the order sorted on Asset Management grid