Asset Disposal Window
Follow the guidelines provided below to complete the fields on the Asset Disposal window.
To view this window, select Asset/Dispose from the menu bar. To view disposal information, select the Transactions tab of the disposed asset.
Items in this window
| Item | Notes |
|---|---|
| Disposal Date (Required Field) | Use this field to enter the date of the asset disposal in MM/DD/YYYY format. The system uses this date and the appropriate averaging convention to calculate gain or loss on the disposal. If you enter a date prior to the asset's current through date, the system recalculates depreciation as of the Disposal Date. The Disposal Date must be on or after the Beginning Date and after the Period Close Date, if any. Note: If the asset uses a "Plus 168" depreciation method, the disposal date cannot occur in the same year that you placed the asset in service. This is to comply with IRS regulations on claiming the Section 168 Allowance. If the Disposal Date is in the placed-in-service year, you must first change the depreciation method in all books so that the asset does not take the 168 Allowance. Then you can enter the disposal information. |
| Disposal Method | Use this field to select the disposal method. The disposal method you select determines how the system treats the default gain or loss of the disposed asset. For a full description of each disposal method, see Disposal Methods. |
| Partial Disposal | Use this field to specify whether this disposal is a full disposal of the acquired value or a partial disposal of the acquired value. Select Yes to perform a partial disposal. The system displays the Partial Disposal window. |
| Cash Proceeds | Use this field to enter the dollar amount of all cash received plus the value of any debts or other liabilities assumed by the buyer. If the disposal is a like-kind exchange, also include the value of any property received that is not like-kind. |
| Non-Cash Proceeds | Use this field to enter the dollar value of any noncash items received. If the disposal is a like-kind exchange, include the value of any like-kind property received. |
| Expenses of Sale | Use this field to enter the dollar amount of direct expenses incurred in selling or otherwise disposing of the asset. The application adds this amount to the asset's basis when calculating the gain or loss reported on Form 4797: Sales of Property worksheet. (You can use the Reports menu to access this worksheet.) |
| [Calculate] | Select this button to calculate the gain or loss on the disposal. |
| Asset Information | The system uses these fields to display relevant information about the asset. |
| Disposal Calculations | The system uses these fields to display the gain/loss calculations. |
| Gain/Loss | The system uses this field to display the realized gain or loss on the disposal after the calculation is complete. The disposal method determines the realized gain or loss. You can override the amount by entering your own figure. Precede a negative number with a negative sign; do not enclose a loss amount in parentheses. |
| Recognize? | Use this field to specify the appropriate recognition choice. If you want the system to recognize a gain or loss (that is, report on it in the tax and company books), specify Yes. You can also specify Defer to defer the recognition until a later date. Defer causes the system to enable the Deferred Date field below the Recognize field. Based on the disposal method you choose, the system automatically sets the Recognize field to the default. For default settings, see "Gain or Loss Recognition Defaults" in the Gains and Losses topic. |
| Deferred Date | The system enables this field only if you specified Defer in the Recognize field. Enter the Note: The Deferred Date must be later than the Disposal Date. |
| 179 Recapture | The system uses this field to display the Section 179 recapture amount as required by tax law. If an asset has taken Section 179 expense and the Section 179 recapture rules apply, you can enter another amount to override the calculated amount. The system carries the amount in this field to the Form 4797: Sales of Property worksheet. (You can use the Reports menu to access this worksheet.) |
| ITC Recapture | The system uses this field to determine the amount of ITC to add back to the asset's basis when calculating gain/loss as required by tax law (if you took ITC on the asset and disposed of the asset before the end of its recovery life). To see the amount of ITC recapture tax, see the Form 4255: ITC Recapture worksheet. (You can use the Reports menu to access this worksheet.) |
| [Worksheet] | Select this button at the bottom of the Asset Disposal window to view a detailed calculation of the gain or loss amount displayed. |