AMT Depreication

Forum|Forum|1 year ago
September 11, 2024
1 reply
16 views

From what I can tell, ProConnect is not doing a good job calculating AMT depreciation.

For AMT, you have to use ADS. If the life is 10 years or less, you can use 150% declining balance.

But I just had a furniture and fixture that I elected to depreciate under ADS SL 10-years for regular tax. AMT depreciation schedules. Here's my input below:

As you can see, the input for the method is 7-year SL, but with a life of 10 years. (The election for ADS is on the elections screen). AMT ignored the life completely and but did pick up the SL. So, it depreciated this asset for 7 years, SL.

If I remove the 10 year class life, and use the 7-year 200% Double Declining Balance, for AMT, the AMT depreciation schedule USES 7-YEAR 200% DOUBLE DECLINING BALANCE!!! It's wrong! It's not allowed!

I mean, there isn't a way to easily switch from GDS to ADS, or from 200% declining balance to 150% declining balance, at least not from the depreciation input screens. There's a whole lot of, "you better know what you are doing, cause the software only helps you if you do know what you are doing."

This topic has been closed for replies.

Best answer by TaxGuyBill

@TaxGuyBill wrote:

"Don’t refigure depreciation for the AMT for the following ... Qualified property that is or was eligible for a special depreciation allowance if the depreciable basis of the property is the same for the AMT and the regular tax."

Okay, looking at the Instructions again, it says to not re-figure for AMT if it is "eligible" for the SDA.

For the most part, AMT depreciation no longer exists for most personal property.

T

TaxGuyBill

Level 15

Unless you elected OUT of Bonus depreciation, I think it is doing it correctly. The 6251 Instructions say:

"Don’t refigure depreciation for the AMT for the following ... Qualified property that is or was eligible for a special depreciation allowance if the depreciable basis of the property is the same for the AMT and the regular tax."

As a side note, even if the above didn't apply, the Recovery Period would still be the same (assuming it was not Section 1250 property and placed in service after 1998; but 150% DB would still apply).

PatrickSanfordAuthor

Level 3

Sorry TaxGuyBill, I should have put that in my original post. This is if you are electing out of bonus depreciation.

And, you are right, the 150% would apply. But if you elect out of bonus in the software, and put a 5-year or 7-year property at 200% regular tax, the software just copies what is in federal for AMT. That's not right. A 7-year 200% GDS property should be a 10-year 150% for office furniture, fixtures, and equipment. ProConnect is not getting this right.

T

TaxGuyBill

Level 15

@PatrickSanford wrote:

A 7-year 200% GDS property should be a 10-year

No, it is still 7 year. See the Instructions for 6251.

As for the 150% for AMT, are you SURE you elected out of Bonus? Your screenshots don't seem to indicate that you did that.

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