CCH Axcess Tax

Amortization, Section 179 Carryover, and Computer Software

A. Amortization. Enter an "A" if the asset is amortizable property. Current year amortization carries to Form 4562, Part VI. (See instructions for the "IRC Section" field on the Depreciation and Amortization > General section for additional information.)

Caution: The life must be entered in months. If no entry is made for life, 180 months will be assumed.

A197. Amortization of Section 197 Intangibles. Enter a method of "A197" if the asset is amortizable Section 197 intangibles. Current year amortization carries to Form 4562, Part VI. A full month of amortization is included for the month the asset is placed in service and none is calculated for the month of disposition.

Caution: The life must be entered in months. If no entry is made for life, 180 months will be assumed.

FILM- Amortization of Film, Theater, and Television Productions. Enter a method of "FILM" if the asset is a film, theater, or television production and can be amortized over a 15 year period. This asset will qualify for bonus depreciation if placed in service after 9/27/2017. Current year amortization carries to Form 4562, Part VI. A full month of amortization is included for the month the asset is placed in service and none is calculated for the month of disposition.

Caution: The life must be entered as 180 months. If no entry is made for life, 180 months will be assumed.

CO. Section 179 Expense Carryover. Enter a method of "CO" for any prior year Section 179 expense carried over from prior tax years due to the taxable income limitation. Enter the prior year amount in the "Section 179" field. The amount carries to the "Carryover of disallowed deduction from 2018" line of Form 4562.

Note: The prior year Section 179 carryover is subject to the expense limitation, the cost of property limit, and the current year taxable income limitation. Prior year Section 179 carryover disallowed in the current tax year is available for carryover in future tax years. The amount of the carryover is indicated on the "Tax Return Carryovers to 2020" report.

CO1. Section 179 Expense Carryover for real property with a method of MSL. Enter a method of "CO1" for prior year Section 179 expense from real property where the method was MSL and is carried over from prior tax year due to the business income limitation. Enter the prior year disallowed amount in the "Section 179" field. The amount carries to the "Carryover of disallowed deduction from 2018" line of Form 4562. Also, enter a date in service of the first day of the current tax year, a life that matches the life from the original asset resulting in the Section 179 carryover, and the applicable Real Property Section 179 Type.

Note: The prior year Section 179 carryover is subject to the expense limitation, the cost of property limit, and the current year business income limitation. Prior year Section 179 carryover from real property disallowed in the current tax year is NOT available for carryover in future tax years. The disallowed amount will be depreciated based on the method and life entered. A new asset is created using the remaining amount as the cost, and the Description, Date in Service, Life and other applicable entries from the CO1 asset. The Method used will be "MSL."

CO2. Section 179 Expense Carryover for real property with a method of ADS. Enter a method of "CO2" for prior year Section 179 expense from real property where the method was ADS and is carried over from prior tax year due to the business income limitation. Enter the prior year disallowed amount in the "Section 179" field. The amount carries to the "Carryover of disallowed deduction from 2018" line of Form 4562. Also, enter a date in service of the first day of the current tax year, a life that matches the life from the original asset resulting in the Section 179 carryover, and the applicable Real Property Section 179 Type.

CS . Computer Software and Mortgage Servicing Rights. Enter a method of "CS" if the asset is computer software or mortgage servicing rights. Enter a life of 3 years for computer software and 9 years for mortgage servicing rights. A full month of depreciation is included for the month the asset is placed in service and none is calculated for the month of disposition. The amount of depreciation carries to Form 4562, Part III.