CCH Axcess Tax

Ratio ID for Special Allocation or 754/1120-FSC/REIT/IC-DISC Code

For Form 1065 returns, when a number is entered in the "Ratio" column that matches a ratio ID number entered on the Special Allocations worksheet, current year depreciation or amortization deduction is treated by the code selected. Available codes are:

Blank	The total of all Section 754 amounts are reported on Form 1065, Page 4, Schedule K, other deduction. Using the asset ratio, the partner's total allocated Section 754 amounts are reported on Schedule K-1, other deductions.
	Section 754 adjustment. All the Section 754 depreciation adjustments for an entity are totaled and subtracted from the current year depreciation deduction to arrive at net depreciation.
	All tax preference, alternative minimum tax and ACE amounts associated with a Section 754 asset are allocated using the same asset's ratio.
	Schedule K and K-1 attaches a statement showing the total specially allocated Section 754 depreciation/amortization.
1	The 754 depreciation/amortization; in addition to being included as regular depreciation/amortization depending on entity type, are included with 1065, Page 4, Schedule K, line 1, Ordinary Income (Loss), line 2, Rental Real Estate or line 3, Other Rental. Section 754 Royalty and Portfolio depreciation/amortization are reported on the Schedule K and K-1 other deductions line.
	Each asset's current year deduction amount is allocated to partners' using its asset ratio. After the assets are allocated, depending on entity type, the total for each partner, is included on the partner's Schedule K -1, line 1, Ordinary Income (Loss), line 2, Rental Real Estate or line 3 Other Rental. Royalty and Portfolio depreciation/amortization are reported on the Schedule K-1, Other Deductions line.
	Schedule K-1 attaches a statement showing the total specially allocated Section 754 depreciation/amortization for each entity type.
	All tax preference, alternative minimum tax and ACE amounts associated with a Section 754 asset are allocated using the asset's ratio.
2 or 3	The specially allocated depreciation/amortization; in addition to being included as regular depreciation/amortization, depending on entity type, are included with 1065, Page 4, Schedule K, line 1, Ordinary Income (Loss), line 2, Rental Real Estate or line 3, Other Rental. Specially allocated Royalty and Portfolio depreciation/amortization are reported on the Schedule K and K-1 other deductions line.
	Each asset's current year deduction amount is allocated to partners' using its asset ratio. After the assets are allocated, depending on entity type, the total for each partner, is included on the partner's Schedule K-1, line 1, Ordinary Income (Loss), line 2, Rental Real Estate or line 3 Other Rental. Royalty and Portfolio depreciation/amortization are reported on the Schedule K-1, Other Deductions line.
	Schedule K-1 attaches a statement showing the total specially allocated depreciation/amortization for each entity type as regular (with code 2) or Section 704 (c) (with code 3) depreciation/amortization.
	All tax preference, alternative minimum tax and ACE amounts associated with a specially allocated asset are allocated using the same asset's ratio.

If an asset has state if different amounts in this section, then these state if different amounts are also allocated to the state Schedule K-1's using the ratio indicated in this field.

(Refer to the state instruction guides for further information on treatment of Section 754 amounts in that state.)

Section 705(c) Assets

On Special Allocation worksheet"Section 704(c) Partner Number" is associated by the Ratio ID Number entered on the Ratio ID Number field on Special Allocation worksheet matched to the Ratio ID number field on the Depreciation worksheet

The partner number field provides the partnership a tracking mechanism, a requirement under regulations section 1.704-3, of the partner who contributed an Section 704 (c) asset to the partnership with build-in gain or build-in loss.

The "Section 704(c) Partner Number is NOT used for allocation.

Note: The allocation input for each partner should be entered as percentage or units. Entering amounts for a ratio that is being used for multiple depreciation/amortization properties will cause an incorrect output.

For Form 1120 returns, you may tie the depreciation entries to a particular schedule of Form 1120-FSC. Enter one of the following codes to carry the appropriate information to Form 1120-FSC:

Code	Description
(Default)	Taxable nonforeign trade income
1	Foreign trading gross receipts - using administrative pricing rules
2	Foreign trading gross receipts - NOT using administrative pricing rules
3	Nonexempt foreign trade income - using administrative pricing rules (COGS only)
4	Nonexempt foreign trade income - NOT using administrative pricing rules (COGS only)

For 1120 returns, enter the following code for "Other Depreciation" to carry the appropriate information to Form 1120-REIT:

Code	Description
(Default)	Real estate investment trust taxable income
1	Foreclosure property

For 1120 returns, enter the following code for "Other Depreciation" to carry the appropriate information to Form 1120-IC-DISC:

Code	Description
1	Form 1120-IC-DISC, Schedule E Schedule P (Form 1120-IC-DISC)

Note: This box is not valid for Form 1120S returns.