Negative Depreciation
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I have numerous partnerships that have Section 754 elections in effect. A few of the entities now have some negative basis adjustments. Neither Fixed Asset Manager nor ProSeries Tax allow for negative assets.
I now have to remember which asset classes should be negative. When I import the fixed assets into ProSeries I need to delete the assets that should be negative and manually enter the negative adjustment.
Am I the only one with this problem? If not, does anyone have a better work around.
What I'm really interested in knowing is whether Intuit has any plans to update either product to handle this situation.
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if you have "negative" assets kinda sounds like your records are screwed up
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I just happened to finally have the time to review some of the Intuit Community questions.
This is the first time I've encountered anyone who has the same problem as myself.
For several years I've had to manually adjust negative Section 754 depreciation on a Lacerte partnership return. It would be great if it was an easier entry!
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I agree that this lack of computing negative adjustments re Section 754 does cause grief. The easiest workaround I have found (until Intuit provides a fix) is to keep "classes" of your assets subject to Section 754 and computing on excel. If you just keep "classes" rather than separate calculations for each asset (I realize you should do it for each asset), there are only 4 or 5 calculations rather than hundereds (like in my situation). then just place the Section 754 adjustment on the affected K-1. I generally keep the Section 754 "off the books" rather than running it through the partnership return anyway. I suppose it could be done either way, but the adjustment does affect the sole partner, not the entire partership, right?
Oh well...I'm really just waiting for Intuit to provide the fix. Let me knwo when hear they have.
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Mt Juliet CPA -
Before you make a comment, be sure you understand the question. I have partnerships that have Section 754 elections in place that require the partnership to adjust the basis of assets to the current fair market value for the successor in interest of a partnership interest for a partner that has died. Due to the recent decline in real estate values, this adjustment becomes a negative number, thus requiring negative fixed assets and negative depreciation.
Another instance where negative assets/depreciation might be needed is where there has been a cancellation of debt and assets must be adjusted (reduced), rather than attempting to restate each asset to a reduced value in the schedule a "lump" negative asset is added to the schedule.
For information sake, ProSeries is aware of the situation and is on the list to be included as a possible future upate.