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Depreciation

Restrictions for selecting assets for a mass disposition

When entering a mass disposition, keep in mind these restrictions for selecting assets:
  • You can't use like-kind exchange for 1245 property disposed after 12/31/17.
  • Don't mass dispose assets that are Sold/Scrapped for federal purposes but are part of a like-kind exchange for book or state purposes
  • Group only like-kind assets together as a mass asset disposition. For example, group section 1245 property with other section 1245 property. If you group different property types in a mass disposition, the application will use the treatment assigned to the lowest asset number in the 1st group of the 1st business activity as the treatment for the entire mass disposition.
  • Group long-term assets with other long-term assets, and short-term assets with other short-term assets.
  • Include land assets only in mass dispositions containing other land assets. Including land assets with depreciable assets in a mass disposition will result in incorrect disposal information.
  • Include standard mileage assets only in mass dispositions containing other standard mileage assets.
  • For treatments following IRS Notice 2000-4 or Reg. 1.168(i)-6, ensure the replacement asset calculates using either a MACRS or a non-MACRS depreciation method throughout each component. This lets the application set up the aggregate asset correctly. For example, in a mass trade, don't trade together an asset with a Tax treatment that depreciates using the MACRS method and an asset with a Tax treatment that depreciates using the Units of Production method.
  • When the option to include assets with Section 179 in the disposition is checked, and the assets have Section 179 claimed at the federal but not for a state, exclude those assets from the mass disposition.
  • Don't group qualified real property assets with Section 179 with non-qualified real property assets that have taken Section 179.
  • Investment credit recapture and Hawaii excise tax credit recapture doesn’t calculate automatically for assets sold in a mass disposition. To calculate the credit recapture for assets that qualify, open the asset and select
    Tasks
    , then
    Investment Credit Recapture
     or
    Hawaii Excise Tax Credit Recapture
    . Once you calculate the recapture, you need to recalculate the mass disposition. To do this, select
    Tasks
    ,
    Mass Dispositions
    , then the mass disposition. Select
    Edit
    , then
    Enter Disposal Information
    .
  • Group assets with a business use percentage of less than 100% with assets that have the same business use percentage.

This article applies to:

  • Product: UltraTax CS
  • Return type: 1040 Individual,1120 Corporation,1065 Partnership,1041 Fiduciary,990 Exempt Organization
  • Subject: Depreciation

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