Adjusted Current Earnings (ACE) [R0312]

The Adjusted Current Earnings (ACE) Depreciation report [R0312] provides the ACE depreciation expense for all assets using the purchase price and the AMT basis or the regular tax basis depending on the AMTI type of property. The recovery period is either full recovery or the recovery period at the start of the first tax year starting after 1989 as required for the AMTI adjustments.

Because of tax law changes, assets with in service dates on or after 1/1/94 are excluded from the report.

The report is designed to provide depreciation information necessary to calculate the ACE tax depreciation adjustment in a format that will allow the data to be easily verified. The ACE report can be run any time after year end for any fiscal year on or since tax year 1989.

The report is organized by Portfolio, Company, Region, and Office. The report is selected for all assets, and may be selected for:

• All portfolios or a specific portfolio
• Any fiscal year after 1989
  
  
  

Report Selection

• ALL (Y/N)
  Enter X to report on all portfolios.

• PORT
  Enter 2-digit portfolio number if reporting on a specific portfolio.

• TAX REPORTING YEAR
  Enter 2 digits for the tax year for ACE reporting. It must be on or after tax year 1989. Only one year's ACE information can be available at a time. Year-end data for the year selected must be available; that is, year-end must have been run through end of period processing, and data for the selected year must be loaded, not archived.

 

Adjusted Current Earnings Report

The ACE Depreciation Report reports at the asset level and includes the following information:

• LEASE
  For informational purposes the current lease number is displayed. If the asset is in inventory (off-lease), no lease number is shown.
  
  
• 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.
  
  
• ACTY STAT
  The activity status of the asset. This is used to track whether the asset has been sold.
  
  
• IN-SERVICE DATE
  The in-service date of the asset. Assets with in-service dates of 1/1/94 or after are excluded from the report.
  
  
• SALE DATE
  The sale date if asset was sold.
  
  
• FEDERAL DEPRECIATION METHOD
  The method used for calculating federal income tax is displayed.
  
  
• AMT DEPRECIATION METHOD
  If it is BYnn (Bypass), the federal depreciation method will be used to calculate AMT amount. If both AMT and FED methods are BYnn, no AMT amount will be calculated.
  
  
• ORIGINAL RECOVERY PERIOD
  The number of months estimated to be the depreciable life of the asset. This number is calculated using the last 2 characters of the Federal Depreciation code times 12 months in a year.
  
  
• ACE RECOVERY PERIOD
  The number of months to be used as the recovery period for purposes of ACE tax adjustment.
  
  Full recovery period is used for property placed in service in the Tax Year starting after 1989; therefore it equals the original recovery period.
  
  Recovery period left at start of first tax year starting after 1989 is used for property placed in service between 1987 and Tax Year starting before 1990. Recovery period left at start of first tax year starting after 1989 is also used for property placed in service between 1981 and 1986.
  Recovery period left is calculated as the original recovery period minus the number of months the asset has depreciated from the in-service date to the beginning of the Tax year 1990.
  
  
• REMAINING RECOVERY PERIOD
  The number of months remaining for ACE reporting as of the beginning of the current tax (reporting) year.
  
  
• ORIGINAL ACQUISITION COST
  The original tax depreciation basis for the asset is displayed.
  
  
• PRE '90 LTD DEPRE
  The total accumulated depreciation prior to the beginning of the Tax Year 1990. The depreciation life-to-date as of the beginning of the Tax Year 1990 for the asset is displayed. This figure is used to calculate the starting basis for ACE depreciation. The amount is either the AMT depreciation or the Federal depreciation, depending on the in-service date of the asset as required by the Federal Tax regulation.
  
  Property placed in service in a Tax Year starting after 1989 reports zero. Property placed in service between 1987 and tax year starting before 1990 reports the AMT life-to-date depreciation. Property placed in service between 1981 and 1986 reports the federal depreciation life-to-date. Property placed in service 1981 reports the federal depreciation life-to-date.
  
  
• ACE TAX BASIS
  The starting basis for the ACE depreciation calculation is reported. Property placed in service in the Tax Year starting after 1989 uses the purchase price. Property placed in service between 1987 and tax year starting before 1990 uses the AMT basis at the start of the first tax year starting after 1989. Property placed in service between 1981 and 1986 uses the regular tax basis at the start of the first tax year starting after 1989.

ACE TAX BASIS = ORIGINAL ACQUISITION COST - PRE '90 LTD DEPRECATION

• ACE BEGINNING OF YEAR ACCUMULATED DEPRECIATION
  The ACE total accumulated depreciation amount for each asset (starting from tax year 1990) up till the beginning of the current reporting year.
  
  
• ACE CURRENT YEAR DEPRECIATION
  The ACE depreciation amount using the ACE tax basis and ACE recovery periods. The calculation uses the straight line method except when the asset was placed in service prior to 1981, in which case the regular tax method is used.
  
  
• TOTALS/GRAND TOTALS
  The page totals for the report reflect the number of assets, cost basis and the ACE depreciation dollar amounts for each office, region, company and portfolio.

 

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