NetAsset - Tax Complete Setup
Overview
NetAsset has the ability to determine tax specific depreciation methods according to the asset type and auto-populate the alternate schedules on asset records. If you are interested in this paid add-on feature, please reach out to your account manager.
Configure system setup
- Navigate to NetAsset > NetAsset Setup > System Setup > System Features and check the Tax Engine, Tax Schedules, and Alternate Schedules boxes in the System Features section. Click Save.
Multi-book can be used with the tax engine in specific use cases but is strongly discouraged and it not a fully vetted combination in NetAsset. To enable Multi-book with the tax engine, the Multi-Book and Tax Multi-Book features must also be checked.
Asset type setup
- Enabling the tax engine adds an additional field for Tax Classification to each asset type.
- To set this up navigate to NetAsset > NetAsset Setup > Manage Asset Types & Mappings. In the Tax Information section, select the desired property type for the Tax Classification field. This is what drives the correct year option from the available depreciation methods.
- Click Save. Alternatively, tax classification can be uploaded using a CSV upload to mass update your types.
Depreciation method setup
Tax methods for GDS standard 200% and GDS 150% can be downloaded into your system using the Tax Method Import Tool. When downloaded through the tool, all mapping for tax selection will be auto-populated.
- The Depreciation Method record has specific fields that need to be populated for accurate tax classification. The fields can be populated via CSV import or manually via NetAsset > NetAsset Setup > Manage Depreciation Methods.
- Only the applicable tax methods need to be updated with the following information:
| Field | Purpose | Example |
|---|---|---|
| Classification of Property | Ties the depreciation method to an IRS property class. The tax engine uses it to find the right method for each asset. | 5-year property, 20-year property, 27.5-year residential rental property |
| MACRS Selection | Says which convention table the method is for: half-year, or one of the four mid-quarter quarters. NetAsset uses the asset's in-service date and the 40% mid-quarter test to pick which one applies. | Half Year, Q1, Q2, Q3, Q4 |
| Tax Month | Only for real property (27.5-year residential and 39-year nonresidential). Gives the month placed in service, because real property uses mid-month tables. Leave it blank on MACRS methods. | January (for a "27.5 Year January" method) |
| Tax Year | Optional. Limits the method to one tax year. If left blank, the method can be used in any year. | 2026 |
| Default MACRS System | Says which MACRS system the method belongs to. The tax engine assigns the method whose system matches the Default MACRS System on the Tax Year record. If the Tax Year field is blank, it uses GDS – Standard. | GDS – Standard (200% DB tables), GDS – 150% DB Election (150% DB tables) |
| Override Disposal Convention | Sets how much depreciation is taken in the year an asset is disposed of. When set, it overrides the disposal convention on the asset type. A convention picked at the time of disposal still takes priority. | Half Year (MACRS half-year methods), Mid-Quarter (Q1–Q4 methods), Mid-Month (real property methods) |
- See the Configure Depreciation Methods article to walk through how to manually create a depreciation method if unique depreciation methods are required. Note the auto-population logic only works for methods provided by Netgain currently.
Permissions setup
- Once the tax engine has been set up, there are new permissions that are added to the system. Users who use the tax engine must be set up with access to the following custom record permissions:
- NetAsset Tax Rule
- NetAsset Tax Year
- NetAsset Tax Report
- NetAsset Taxpayer
Taxpayer setup
- Tax years are applied to assets one Taxpayer at a time, so before we can proceed to that step, users have to set up their Taxpayer records. The Taxpayer record is how you group the subsidiaries whose assets will be on the same tax returns. The 179, 168, and quarter convention test will all be applied by taxpayer and all assets assigned to the subsidiaries associated with that taxpayer.
- Every subsidiary should have the Taxpayer field populated. If a subsidiary is not tied to a tax year, you will see an error on the Apply Tax Rules page. This error does not prevent Tax Complete from running.
One taxpayer record can be tied to multiple subsidiaries, however, each subsidiary can only be tied to one taxpayer.
- To configure your taxpayer records, begin by searching for NetAsset Taxpayer and select Page: NetAsset Taxpayer.
- This will take you to your list of NetAsset Taxpayers. These Taxpayer records are used for NetAsset purposes only. To create a new Taxpayer, click the New NetAsset Taxpayer button.
- The only required field is the Name field. Once you have given your Taxpayer the appropriate name, Save your changes. Create as many Taxpayers as you need for all your subsidiaries. Again you can have multiple subsidiaries tied to the same taxpayer record.
- Once all Taxpayers are created, the next step is to tie these records to your subsidiaries. Navigate to Setup > Company > Subsidiaries. Click "Edit" next to the subsidiary record you want to connect a Taxpayer to. You can also update the Taxpayer field for subsidiaries in mass via a CSV update upload.
- Once the subsidiary record opens up, you should see a new NetAsset Taxpayer Mapping field. From the list, tag the appropriate Taxpayer for this subsidiary and save your changes.
- Now, if you navigate back to your Taxpayer record, you will see the tagged subsidiary and its information under the Subsidiaries subtab.
- Once you have configured the setup steps above, the Tax Engine: Manage Tax Years and Tax Engine: Apply Tax Rules articles will walk through the remaining steps to fully utilize the tax engine.
