CCH Axcess Tax

Federal Depreciation and Amortization

Current year federal regular and AMT depreciation, as well as amortization, is computed for each asset and Form 4562 is prepared based on entries from the following depreciation worksheets. The computed amounts carry to the appropriate forms throughout the return based on the specified "Attachment Entity" and "Attachment Code."

There is an option available entitled "Change Attachment/Entity" that can be used to reattach depreciation. PFX users will find this in the "Options" menu. WFX users will find it by clicking on "Forms."

A federal depreciation and amortization detail report is prepared on an attachment entity basis for all assets to support the regular tax depreciation computations. A separate federal AMT depreciation report is also prepared on an asset by asset basis to support alternative minimum tax depreciation computations.

Interview Form	Description
DP-1	Federal Depreciation and Amortization
DP-3	Listed Property, 4562 Questions, and Percent Excluded Information

Use the Depreciation and Amortization worksheet, General section to enter state if different asset information.

Attachment Entity and Attachment Code (MANDATORY)

One of the following Attachment Codes must be entered in the upper right-hand corner to indicate where to carry the related depreciation and amortization amounts in the return:

Attachment Code	Carries To
3	Schedule C
4	Form 2106/SBE
5	Rental/Schedule E
6	Farm/4835
7	Depletion
8	Schedule A
9	Schedule K-1
10	Form 8829 (Home Office)

A total of five assets may be entered on a single Depreciation and Amortization worksheet, General section sheet. Enter the same "Attachment Code" on every depreciation worksheet sheet for all assets related to the same "Carry to" kind and entity.

For each different "Carry to" kind (Schedule C, Rental/Schedule E, 2106/SBE, Farm/4835, depletion, and Form 8829) requiring depreciation, the same "Entity" Number entered in the upper right-hand corner of the Business worksheet, Rent and Royalty worksheet, Employee Business Expense worksheet, and Farm worksheet respectively, must be entered on all related depreciation worksheets as the "Attachment Entity." For depreciation relating to Schedule A, enter an "Attachment Entity" of "1."

Note: Enter the "Activity Number" entered on as the depreciation "Attachment Entity" for ALL depreciation worksheets related to that particular "Activity" of Schedule K-1 ("Attachment Code" 9).

Example: The taxpayer has two rental properties with depreciation. First, enter information for each rental on a separate Rent and Royalty worksheet and indicate a unique "Entity" number for each rental property in the upper right-hand corner of each Rent and Royalty worksheet. Enter the depreciation information for all assets on separate Depreciation and Amortization worksheet and enter the "Attachment Code" of "5" at the top of the worksheet(s). Tie the depreciation back to the related rental property by entering the same "Entity" number as the "Attachment Entity" at the top of each Depreciation and Amortization worksheet as entered on the Rent and Royalty worksheet.

Other Information

The asset number must be unique throughout the entire tax return. Up to 65,534 assets can be processed in a return.

Enter the same property number in the "Depletion Number" Depreciation and Amortization worksheet, SECTION, FIELD as entered on the Rent and Royalty worksheet, Depletion (Simplified) section in the "Property and Cost Depletion" section for each asset related to that particular depletion property.

Gross accumulated depreciation will be proformaed and the net business use accumulated depreciation will be pro formaed for current year assets.

Net business use accumulated depreciation will only be proformaed for prior year assets when an amount is present for the amount of prior year business use accumulated depreciation from prior years. If no business use amount exists from prior year assets, no amount is proformaed to next year.

The IRS allows the full "Auto Limit" in the year of acquisition and the year of disposition if the calculated depreciation, based on the appropriate convention, is greater than the "Auto Limit."

Mandatory Entries:

Attachment Entity
Attachment Code
Asset Number