Related topics

Audit Advisor Validations

Reviewing Assets for Tax Compliance

Assets that may require 100% bonus on or after 1/20/2025

This Audit Advisor identifies MF and AD assets PIS after 1/19/2025 that may qualify for 100% bonus based on their estimated life. Another advisor covers SF 3-year assets for off-the-shelf software.

Issue

For qualifying assets placed in service on or after January 20, 2025, a 100% 168 Allowance, or first-year bonus, is generally required.

This review identifies MACRS assets that are not taking bonus but appear eligible—specifically: assets with a depreciation method of MF or AD with an estimated life of 20 years or less, or 25 years.

Reasons to not take bonus include:

  1. The company elects not to take the 100% bonus for specific property classes.

  2. The property does not qualify for the bonus if it is:

    • primarily (50% or more) used outside the U.S., or

    • used 50% or more for non-business purposes.

Resolution

The system has identified assets that may require the 100% Allowance. Review the asset group created below to verify any qualifying assets.

For qualifying assets, select Depreciation > 168 Allowance Switch, enter the fiscal year end, and select Change qualifying assets to 100% allowance.

Group Created

AA-MF_AD_+168?-XXXX-mm/yy: where XXXX stands for book name