Asset Manager

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Asset Manager
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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

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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

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Asset Management
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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 assets
  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

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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

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General Tab
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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

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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

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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

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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

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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

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Liberty Zone Property Other Tests

• Acquisition date test
• Placed in service date test
• Substantial use test
• Original use test
• Exceptions

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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

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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 (cant be to a common area, not
  an elevator/escalator, or enlargement of the
  building)

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Vehicle Tab
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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)

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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 anad 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

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Standard Mileage Rates
TLC
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Automobile LimitationsPassenger Autos
TLC
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Disposition Tab
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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)

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Group Sale
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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

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Group Installment Sale
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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

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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

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Group Like-Kind Exchange
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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)

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Group Casualty or Theft
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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

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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

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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

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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

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Button Bar

• New Asset
• Special Allowance
• Calculator
• Section 179

• Settings
• Reports
• Help
• Close

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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

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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

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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)

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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

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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 toprint 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 byaccount
• 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

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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

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Additional Report Options

• Balance sheetreconciliation
• 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 sheeton 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

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Help and Close

• Help
• Feature helps for the Asset Manager
• Contains some examples and frequently asked
  questions
• Close
• Close the Asset Manager

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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

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