Tax Depreciation [R0304]

The Tax Depreciation report [R0304] provides year-to-date information on federal, alternative minimum tax (AMT), and state depreciation for the lease portfolio, to assist in the preparation of the lessor’s federal and state tax returns. Life-to-date depreciation is also shown for informational purposes. Two depreciation reports are produced, one for federal and AMT, and one for state.

The report may be accessed through the Controllers Tax report menu [R03] and may be selected for:

• All assets
• A portfolio

The report may be automatically generated for each portfolio at the end of the month and the end of the year through the End of Period update [U0401]. Use the End of Period MODULES AND REPORTS screen under the End of Period Customizations option of the Portfolio update [U0212] to specify whether the report is created. (The end of month and the end of year reports are listed separately.)

The Tax Depreciation report [R0304] is segregated into 2 parts: Federal Tax Depreciation report [R0304A] and State Tax Depreciation report [R0304B].

The report is organized by all of the following:

• Portfolio
• State (for the State Tax Depreciation report only)
• Vintage Year
• Depreciation Method and Life

Vintage year is the fiscal year in which the assets were originally placed in service.

 

Tax Depreciation Selection

• ALL
  Enter ‘X’ to report on all assets. Leave blank to report on a specific portfolio.
  
  
• PORT
  Enter the number of the portfolio upon which to report. Leave blank if reporting across portfolios.
  
  
  

Federal Tax Deprecation Report

The Federal Tax Depreciation report [R0304A] reports at the asset level and includes the following information:

• ASSET
  The asset number is displayed.
  
  
• DESCRIPTION
  The asset description, as entered through the Add Asset option of the New Lease update [U0101], is displayed.
  
  
• STATUS
  One of following asset status classifications is displayed:
  
  
  • INVENTORY
    The asset is off-lease, in inventory. Assets are placed in inventory either through the Add Asset option of the New Lease update [U0101] or through the Termination option of the Payoff update [U0103].
  • ON-LEASE
    The asset is on-lease. Assets are placed on-lease through the Book Lease option of the New Lease update [U0101].
  • SOLD
    The asset has been sold. Assets are sold either through the Payoff option or the Sale of Asset in Inventory option of the Payoff update [U0103].
    
    
• IN-SERV DATE
  The date the asset was placed in service, as entered through the Add Asset option of the New Lease update [U0101], is displayed. The in-service date is the starting date for depreciation.
  
  
• COST
  The original acquisition cost of the asset, as entered through the Add Asset option of the New Lease update [U0101], is displayed.
  
  
• ORIGINAL TAX BASIS
  The depreciation tax basis is the original acquisition cost adjusted for any Investment Tax Credit taken (ITC). If the full amount of ITC available is taken, the ORIGINAL TAX BASIS is calculated by reducing the original acquisition cost by one-half of the ITC taken (prior to 1986) or by the full amount of ITC taken (from 1986 on). If a reduced amount of ITC is taken, the ORIGINAL TAX BASIS is equal to the original acquisition cost (i.e., there is no adjustment made). Note that this adjustment is only performed for the Federal tax basis; the State tax basis is unaffected by the amount of ITC taken.
  
  To illustrate, assume that an asset has an original acquisition cost of $10,000.00:
  
  

  	Federal	State
  3 YR FULL ITC TAKEN	9,700.00	10,000.00
  3 YR REDUCED ITC TAKEN	10,000.00	10,000.00
  5 YR FULL ITC TAKEN	9,500.00	10,000.00
  5 YR REDUCED ITC TAKEN	10,000.00	10,000.00

  
  ORIGINAL TAX BASIS is shown rounded to the nearest dollar.
  
  
• DEPRECIATN EXPNSE YTD
  The year-to-date federal depreciation calculated for the asset is displayed. This figure is used to prepare the year’s federal tax return. DEPRECIATN EXPNSE YTD is shown rounded to the nearest dollar.
  
  
• ACCUM DEPREC LTD
  The life-to-date federal depreciation calculated for the asset is displayed for informational purposes. It is used to calculate the federal DEPRECIABLE BALANCE. ACCUM DEPREC LTD is shown rounded to the nearest dollar.
  
  
• DEPRECIABLE BALANCE
  The federal depreciable balance is calculated as follows:
  

  ORIGINAL TAX BASIS
  - ACCUM DEPREC LTD

DEPRECIABLE BALANCE is shown rounded to the nearest dollar.

• AMT LIFE
  The alternative minimum tax (AMT) life is displayed (in years).
  
  
• YTD AMT DEPR DIFF
  The alternative minimum tax (AMT) depreciation difference is the difference between the current year-to-date federal depreciation and the year-to-date alternative minimum tax depreciation. The AMT TAX DIFFERENCE is calculated as follows:

  DEPRECIATN EXPNSE YTD
  - YEAR-TO-DATE ALTERNATIVE MINIMUM TAX DEPRECIATION

  YTD AMT DEPR DIFF is shown rounded to the nearest dollar.

 

State Tax Depreciation Report

 

The State Tax Depreciation report [R0304B] reports at the asset level and includes the following information:

• ASSET
  The asset number is displayed.
  
  
• DESCRIPTION
  The asset’s description, as entered through the Add Asset option of the New Lease update [U0101], is displayed.
  
  
• STATUS
  One of following asset status classifications is displayed:
  

  INVENTORY
  The asset is off-lease, in inventory. Assets are placed in inventory either through the Add Asset option of the New Lease update [U0101] or through the Termination option of the Payoff update [U0103].
  

  ON-LEASE
  The asset is on-lease. Assets are place on-lease through the Book Lease option of the New Lease update [U0101].
  
  SOLD
  The asset has been sold. Assets are sold either through the Payoff option or the Sale of Asset in Inventory option of the Payoff update [U0103].

• IN-SERVC DATE
  The date the asset was placed in service, as entered through the Add Asset option of the New Lease update [U0101], is displayed. The in-service date is the starting date for depreciation.
  
  
• SALE DATE
  The effective date of the sale of the asset is displayed for assets with a STATUS of ‘SOLD’.
  
  
• COST
  The original acquisition cost of the asset, as entered through the Add Asset option of the New Lease update [U0101], is displayed.
  
  
• ORIGINAL TAX BASIS
  The state depreciation tax basis is the acquisition cost of the asset. Unlike the federal depreciation tax basis, the state depreciation tax basis is not adjusted for any investment tax credit (ITC) taken.
  
  
• DEPRECIATN EXPNSE YTD
  The year-to-date state depreciation calculated for the asset is displayed. This figure is used to prepare the year’s state tax return. DEPRECIATN EXPNSE YTD is shown rounded to the nearest dollar.
  
  
• ACCUM DEPREC LTD
  The life-to-date state depreciation calculated for the asset is displayed for informational purposes. It is used to calculate the state DEPRECIABLE BALANCE. ACCUM DEPREC LTD is shown rounded to the nearest dollar.
  
  
• DEPRECIABLE BALANCE
  The state depreciable balance is calculated as follows:

  ORIGINAL TAX BASIS
  - ACCUM DEPREC LTD

  DEPRECIABLE BALANCE is shown rounded to the nearest dollar.
  

• TOTALS/GRAND TOTALS
  Page totals for the federal report reflect the number of assets and all dollar amounts for each portfolio and header type (vintage year and depreciation method/life). Page totals for the state reports reflect the number of assets and all dollar amounts for each portfolio and header type (state, vintage year, and depreciation method/life).

  Page totals for the various header types are combined on the portfolio total page. On the federal report, the number of all assets and all dollar amounts are shown by depreciation method/life within vintage year. On the state report, the number of all assets and all dollar amounts are segregated by state. Underlying each state, subtotals are shown by depreciation method/ life within vintage year.

  Grand totals are shown for the number of assets and all dollar amounts.

 

LeasePak  Reference Guide

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