Audit Advisor Validations
Which tax requirements does Audit Advisor check for?
The Audit Advisor reviews your assets to help you determine if they comply with the following IRS regulations:
Generally, all assets placed in service after 12/31/1986 must use a MACRS (Modified Accelerated Cost Recovery System) depreciation method.
IRS regulations limit the total amount of Section 179 that you can take on assets placed in service in a taxable year.
Certain MACRS depreciation elections must be made on a class-by-class basis.
Assets with Less Than 100% Business Use
Assets with less than 100% business use are not entitled to a full year's depreciation deduction. The business-use percentage may change over time and should be reviewed on an annual basis.
Accelerated Depreciation for Indian Reservation Property
Indian Reservation property legislation was not extended past 12/31/2017 but the methods have been made available in Sage Fixed Assets through 12/31/2018.
168(k) Allowance of 100% Applicable 9/28/2017 to 12/31/2022
The Audit Advisor finds assets qualified for the 168(k) Allowance percentage of 30%, 40%, 50%, and 100%.
168(k) Allowance of 80% Applicable 1/01/2023 to 12/31/2023
The Audit Advisor finds assets qualified for the 168(k) Allowance percentage of 80%.
168(k) Allowance of 100% only applicable for LPP and NCA in 2023
The Audit Advisor finds longer production period assets and noncommercial aircraft that qualify for a higher 168(k) Allowance percentage.
Section 179 Designated Zone Property
The Audit Advisor reviews assets placed in service after 12/31/2020 to verify that they have a Zone Type of ‘X – Not Applicable’ and do not qualify for increased Section 179 expensing.
168(k) 100% Allowance applicable 1/20/2025 and later
This Audit Advisor identifies assets placed in service after 1/19/2025, that use a +168 depreciation method and claim less than 100% bonus depreciation.
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.
Software that may require 100% bonus on or after 1/20/2025
This Audit Advisor identifies off-the-shelf software 3-year assets PIS after 1/19/2025 that may qualify for 100% bonus.