Generate Form 4562 for new client with previous depreciation and amortization

[kelly6]

Hello, 
I have a new client that has previously depreciated their car and amortized start up costs - and I need to generate a new Form 4562 for them in this year's tax return.

I am struggling to get either to generate correctly.

For the car, their old accountant had Part V Line 26(d) of cost basis as $20,681, and 26(e) basis for depreciation as $2581 (even though they show that the auto is 100% business use).

I've put in the basis as $2581, but because it is not currently 100% business use, I think that ProConnect is not allowing the deduction (this is all made even more annoying, by the fact that in fact, the business does not own the car, she does as an individual, but her old S-Corp returns are showing that nearly $19k has been depreciated - even though only $1300 in depreciation has actually been taken.


With regards to the amortization - I can't figure out why the amortization won't show up...any tips?

[TaxGuyBill]

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@kelly6 wrote:

For the car, their old accountant had Part V Line 26(d) of cost basis as $20,681, and 26(e) basis for depreciation as $2581 (even though they show that the auto is 100% business use).

 showing that nearly $19k has been depreciated - even though only $1300 in depreciation has actually been taken.

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I don't use ProConnect, but I can help make sense of those numbers - they indicate that $18,100 was used as Bonus depreciation or Section 179.

Are you preparing the S-corp return?  If so, why are you entering it for depreciation if the corporation doesn't own the vehicle?  Just because the prior tax returns did it incorrectly doesn't mean that you should do it incorrectly.

[DCG]

Thanks @TaxGuyBill  - so a couple of questions on this:

1) If the vehicle is personally owned by the owner-employee of an S corp and he/she uses a personal vehicle for business >50% of the time, assuming this vehicle is being financed with a loan made out to the owner personally (not the S-corp), There should be no Liability and no depreciation showing on on the S Corp books, correct? (I am thinking of an accountable plan to reimburse the owner)

2)In a Scenario where bonus depreciation and 179 deduction and maybe Macrs  are taken for the same asset (think of a vehicle, not owned by the S corp but owned byt the owner-employee of an S-Corp with >50% business use), do you still use the software to keep track of all of this? What is your process? I can't imagine keeping track of these in a separate excel file for example. Thank you in advance

[TaxGuyBill]

1)  I agree.  In my opinion Accountable Plans can also reimburse for depreciation, including Bonus or 179.  So I suppose that hypothetically their "book" accounting use some weird way of calling the depreciation.  But I wouldn't go down that route.

2)  I use ProSeries, and it has a spot for the 179 and Bonus (they are in the spots I would enter it for the first year, but it just carries over from year to year for record-keeping).  I would THINK ProConnect would as well, but I'm unsure how to do it.