How do I add $1 rounding to a fully amortized asset?

[david3]

Re-fi costs on the depreciation schedule have a remaining balance of $1 due to rounding. Other than overriding, I don't see where I can enter this rounding adjustment in the Asset Entry Worksheet.

Does anyone know how to adjust amortization or depreciation in situations like this? Anytime I override a number it creates an e-file error and I can't e-file without canceling the override.

Thanks for your help.

[dkh · Accepted solution]

Do the override.  When efiling that client's return, uncheck the Enable conversion error checking. Problem solved.      I would be sure only this client is selected for efiling when you uncheck the conversion error checking box.

[david3]

Thanks for helping with this.

[TaxGuyBill]

I've never seen that.  If you make sure the "prior depreciation" is correct, the final year of the recovery/amortization period SHOULD automatically take the rest of it.

[david3]

I've never seen that either. It appears to be rounding. The re-fi costs were $2,096 amortized over 5 years at $419/year. This is the fifth year and there is a remaining balance of $1. It appears that amortization was $419.20/year. 

So it appears the $1 rounding is due to the .20/year amortization not recognized. You would think the program would automatically adjust that to $420 final year amortization.

Thanks.

[TaxGuyBill]

Now that I think about it, amortization would probably do that, but depreciation wouldn't.  Depreciation uses a formula that would use the rest of it in the final year.

Personally, I would just add a few bucks to the Basis/amortization cost to make it calculate that extra $1.

[The_AntiTax_Man]

@david3   Orrrrr..., you can sell the asset for $0 on December 31.  It will show up on the 4797 with the $1 loss, the asset will be off the depreciation schedule, and you do not have to override the PS depreciation calculation.   

[david3]

Thanks for the recommendations to resolve this.

[david3]

Thanks again for your help. I guess any of these recommendations is better than overriding?

[dkh]

You could leave the $1 alone until after efiling the return.  Then override the prior amount by a dollar so when return transfers to 2020 it will show full amount amortized.   It is only $1 so not like client is losing out on a tax break.