User's Manual - Drake Software

Depreciation
Drake Software User’s Manual
Required
Fields
Required fields on the 4562 screen are described in Table 5-17.
Table 5-17: Required Fields on 4562 screen
Field
Description
For
Description
Date Acquired
Cost/Basis
Method
Life
Used for associating an asset with a form or schedule; see “Associating
One Screen with Another” on page 73.
Description of asset. This field supports 42 characters. Per IRS regulations,
only the first 24 characters are transmitted in e-filed returns. Additional
characters are displayed in red on the screen.
Date the asset was placed in service
Depreciable basis of the asset (press F1 for further details)
Depreciation method
Class life; press F1 for a recovery-period listing.
NOTE
If EXP (section 179) is selected as the depreciation method, the useful
life/recovery period entered in the Life field is used to calculate depreciation
adjustments for Form 6251 (AMT). See “Section 179 Expensing,”
following, for more on section 179.
Business %
Use
The default business percent use is 100%. Enter a number in this field only if business
percent use for the asset is not 100%.
If business use dropped to 50% or less, complete the Business % use field and select
the Recapture box under Other Information. The program recaptures any excess
section 179 or depreciation and carries it to Form 4797 Part IV and to the “Other
income” line on the form being associated with the 4562 screen.
IMPORTANT
EXP cannot be the selected method if the Recapture box is
marked. The Method field must contain an acceptable IRS
method for the recapture to be calculated correctly.
Listed
Property
Type
Prior
Depreciation
A selection in the Listed Prop Type field is required for an asset that could be used
for personal, entertainment, recreation, or amusement purposes. An entry here lists the
asset as “Listed property” on Form 4562. Depreciation limitations could apply.
The amount in the Prior depreciation field is carried from the previous year (if the
information is available). Otherwise, enter this information directly.
Section 179 Expensing
Drake calculates the amount up to the established current-year limit for all properties
expensed under the section 179 deduction. If section 179 (EXP in the Method drop
list) is selected as the depreciation method on more than one 4562 screen, the program
expenses the initially entered items first, regardless of which schedule lists the asset.
166 Tax Year 2012