How to enter asset depreciation in ProSeries

• The Economic Stimulus Act of 2008 provided for a 50% Special Depreciation Allowance for Qualifying Property placed in service after December 31, 2007.
• The American Recovery and Reinvestment Act of 2009 extended the deduction through 2009.
• The Small Business Jobs Act of 2010 extended the deduction through 2010.
• The Tax Relief Act of  2010 extended the deduction through 2012, and for assets placed in service after September 8, 2010 and before January 1, 2012, increased the percentage to 100%.
• The American Taxpayer Relief Act of 2012 extended the 50% deduction through 2013.
• The Tax Increase Prevention Act of 2014 extended the 50% deduction through 2014.
• Qualifying vehicles subject to the Luxury Automobile Depreciation Limitation are eligible for an up to $8,000 larger deduction in the first year placed in service.

Note there are separate rules for:

• Pre-05 Special Depreciation Allowance
• Cellulosic Biomass Ethanol Plant Property
• Kansas Disaster Zone Property
• GO Zone Property

Refer to Tax Help on Economic Stimulus Property for additional information and requirements.

If you entered the Asset Entry Worksheet under the wrong form or schedule, you can often change where it's linked to.

Change Activity isn't available for certain locations, including:

• Car and truck worksheets
• Form 2106, Employee Home Office Asset Entry Worksheet
• Asset entry worksheets attached to Form 8829

To change the activity that an asset is associated with:

1. Open the Asset Entry Worksheet you wish to change.
2. From the Forms menu, select Change Activity.
3. Select the new activity from the list and select Next.
4. Select the existing activity, or create a new one to link the asset to.
5. Select Finish.

Tax year 2019 and later:

For a 1040 return, you may now use type X in the Type of asset field for a non-depreciated asset to enter land on the Asset Entry Worksheet.

Tax year 2018 and prior:

The ProSeriesAsset Entry Worksheet is designed to track depreciable property. If you have a asset that only a portion of the Cost or other basis contains land value, you can enter this on the Asset Entry Worksheet.

Additional information:

• If the Asset only contains land, this can't be entered on the Asset Entry Worksheet.
• When disposing of the asset due to capital loss, the Adjusted gain (loss) basis, if different field must be entered in the Disposition section for the building portion only.
• ProSeries Fixed Asset Manager does support land as an asset to be tracked.

To switch between Forms Mode and QuickEntry Mode for most forms, use Ctrl + M. Data entry flows between the two modes. When you enter something in QuickEntry Mode it appears in Forms Mode and vice-versa.

1. Open the clients return.
2. Press Ctrl + M to switch to the QuickEntry Mode.
3. Press F6 to bring up Open QuickEntry Sheets.
4. Select the Asset List and press Enter.
5. Select the copy for the business activity.
6. Use the table to enter basic information about the assets:
   
7. You can switch back to Forms Mode at any time by pressing CTRL + M.

1. Open the Asset Entry Worksheet.
2. Go to Asset Information Section at the top of the Asset Entry Worksheet.
3. Enter the Prior Section 179 Deduction in the field for Section 179 Deduction.

If there is a carryover of un-allowed section 179 deductions see Entering section 179 carryovers from a prior year.

If the asset was part of a disposition that should be included on the Home Sale Worksheet, you can link the asset entry worksheet to the Home Sale Worksheet:

1. Open the Asset Entry Worksheet. 
2. Scroll down to the Dispositions section.
3. Fill out the date of disposition and sales information.
4. Locate the line and double-click to link the sale to the Home Sale Worksheet.
5. Double-click in the field provided to choose an existing Home Sale Worksheet or create a new one.

If the asset was part of a disposition that should be included in an Installment Sale, you can link the Asset Entry Worksheet to the Form 6252:

1. Open the Asset Entry Worksheet. 
2. Scroll down to the Dispositions section.
3. Fill out the date of disposition and sales information.
4. Locate the line and double-click to link the sale to Form 6252.
5. Double-click in the field provided to choose an existing Form 6252 or create a new one.

Follow these steps to stop depreciation on an asset:

1. Open the Asset Entry Worksheet.
2. Scroll down to the Dispositions section.
3. Locate to the Date of disposition field.
4. Enter the date the asset wasn't used for business anymore.
   • Don't complete the rest of the Disposition section.

Converting assets to personal use

When the taxpayer converts an asset to personal use, there's no gain to report. However, they must report any section 179 recapture in the year of conversion.

• A section 179 deductions is subject to recapture if the taxpayer converted the asset to personal use before the end of its depreciable life. You must manually complete Part IV of the Enterable Form 4797 to compute the recapture.
• If the taxpayer sells the asset in the future, they must still report it as the sale of a business asset, even though they are now using it for personal purposes. Therefore, they must keep all records of business use of the asset, and the amount of depreciation claimed.
• If, during the time the taxpayer used the asset for business, their percentage of business use was less than 100%, they'll have sales to report. They must report the sale of the business portion of the asset and the sale of the personal portion of the asset separately

See Converting a rental property to personal use in ProSeries for more information.

Per the Tax Help for 1040:

REPORTING LAND SEPERATELY

The IRS instructions for Form 4797 state that building and land must be reported separately when there is a gain on the sale.  Therefore, you should allocate the sales price and expense of sale between the building and land based on their respective fair market values.

In addition, if only one part of the sale qualifies for installment sale reporting, you must enter the building and the land on separate Asset Entry Worksheets. The program alerts you when this is necessary.

To separate the building and land, follow these steps:

• Remove the amount in the land included in cost field on the Asset Entry Worksheet
• Reduce the amount in the cost field by the amount of the land value
• Remove any entries in the land sales price and land expense of sale fields
• Make sure that the asset sales price and asset expense of sale fields include only the amounts allocated to the building
• Create a new Asset Entry Worksheet for the land
• Enter the same date placed in service that you used for the building
• Enter the value of the land in both the cost and land included in cost fields
• Select Type "O" (Other)
• Enter the same date sold that you used for the building
• Complete the land sales price and land expense of sale fields using the amounts allocated to the land

If you choose to report building and land as a single sale, check "No" to "Report land separately.

Per the Tax Help for 1065, 1120s and 1120:

"REPORTING LAND SEPARATELY

If the asset has land included in the cost or basis, IRS instructions require that if a gain is realized the disposition of the depreciable asset and the land must be reported separately.  The program's default is to treat the sale of each type of property separately.  To treat the sale of both items jointly, select "No" to Report land separately."

To stop calculating depreciation on an asset that was retired, abandoned, or otherwise disposed of without selling it:

1. Open the Asset Entry Worksheet for the asset that is no longer depreciable.
2. Scroll down to the Dispositions section.
3. Enter the date depreciation stopped in the Date of disposition field.

Don't enter a Sales price. If there's anything entered besides Date of disposition, the program will calculate the gain or loss on the asset.

This asset won't transfer to the next tax year.