due to a change in 2020 ProSeries, prior depreciation on assets is not flowing through to asset entry worksheets. Additionally, prior depreciation does not appear on the deprecation reports. This is a problem for sure. Anyone else seeing this problem?
I'm referring to ProSeries Professional 2020. Several client returns with assets being depreciated are showing this problem in 2020 returns. If you look at an Asset Entry Worksheet for Schedule C or Schedule E assets, the prior depreciation does not appear. You can go to the link for "Asset Life History" to see what the prior depreciation amount should be and manually input that on the Asset Entry Worksheet prior depreciation line. After doing so, the Depreciation Report will show the prior depreciation. Otherwise, the Depreciation Report also does not show prior depreciation on those assets that "prior depreciation" does not appear on the Asset Entry Worksheet. I have noticed some assets show prior depreciation correctly, but other assets do not show prior depreciation until you manually input the prior depreciation.
That issue creates a lot of manual correction to get the Asset Entry Worksheets to show correct prior depreciation, and the Depreciation Report to show the correct Accumulation Depreciation. If this problem is not noticed by the tax practitioner. If an asset is sold this error creates incorrect gain or loss information for tax reporting. In prior years, ProSeries automatically carried through the prior depreciation to the asset entry worksheets and depreciation reports.
Looking for a program fix that would globally fix this issue so practitioners do not have to manually update the depreciation schedules.
I have not had it happen to any of my clients since then though. Be sure you're not transferring client files into the new year's program too early, lots of bits and pieces seem to get missed in early transfers...I know he always transferred as soon as the new product was available, I wait until as late in January as possible.
@cpa2help " In prior years, ProSeries automatically carried through the prior depreciation to the asset entry worksheets and depreciation reports."
Have you seen the prior depreciation carried to the worksheets/reports in the 2020 program or has it only been in prior years?
Thanks for the info!
I'm not sure if you are the same person as this other post or a different person, but:
On the 2019 return, if the asset was "placed in service" before 2019, was the "prior depreciation" filled in on the Asset Entry Worksheet? If it was not your client in the year it was "placed in service", the "prior depreciation" needs to be filled in, or else nothing will be carried to the next year.
Did you transfer your clients really early in the year? If so, that frequently causes problems. It is generally recommended to not transfer your clients until at least January.
I am the same person as the other post from cpataxman. I had to set up a new user name to post my question at first.
The clients I'm referring to have been with me several years, and asset entry worksheets and the depreciation reports showing prior depreciation on returns prior to 2020. It appears to be a glitch in the 2020 tax software.
These responses might explain my 2021 problem. I was eager to help client estimate taxes he will owe on a rental property sold with 300K profit showing on Form 4771, but it didn't flow into Sch D long term gain. Is this because I'm using 2021 too soon? Will this likely trigger an AMT? This client earns only about 50K from his job.
"Is this because I'm using 2021 too soon?"
January is probably too soon to be using it. I wouldn't trust the program for anything at this point in time. They release the program this early only so folks can be beta testers.
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Id use a copy of the 2020 return to do a "what if" scenario for the sale, or wait a few weeks and get some updates to 2021 installed before using it for this.
I discovered the problem in my ProSeries Professional 2020 tax returns in October 2021, not the 2021 version just released. I printed a Depreciation Report in ProSeries 2020 and discovered that prior year depreciation through 2019, was not appearing on the Depreciation Report.
The client files were transferred from 2019 returns to 2020 returns after February 2021. So the issue shouldn't be early transfer of the files.
Is anyone else seeing this problem with 2020 client returns that have depreciable assets? That is, the depreciation reports aren't showing correct prior depreciation in 2020 ProSeries tax returns?