Reduce by ITC Field

Use this field on the Book Overrides tab to select which of the two ITC options you want to apply: reduce or not reduce the basis of assets qualifying for the Investment Tax Credit. The selection you make here applies to all assets in the system, whether previously depreciated or not.

For assets that were placed in service after 1982 and before 1986, companies taking an Investment Tax Credit (ITC) had two choices:

• take the full ITC but reduce the basis of the asset
• take a reduced ITC without adjusting the basis.

For assets that were placed in service after 1985, only the first option applies.

The default setting is to reduce the basis of all assets for which you did not take the full ITC. The system takes this reduction for all books except the Internal book, to which the ITC does not apply.

If you do not want the system to reduce the basis of appropriate assets in a book, select No.

Depending on the book and the ITC option you choose for an asset, you may need to override the system-calculated ITC percentage and ITC amount in Asset Detail to conform to IRS regulations.