NetAsset - Tax only Asset
Overview
In some rare instances, a NetAsset user might need to track an asset for tax purposes only, but not for book purposes. These asset records need to be set up according to the steps below, to ensure they do not have any journal entries posted for book purposes.
Please note that the solution below is meant only for assets whose alternate schedules are non-posting.
Prerequisites
In order to create these tax assets, you have to first ensure that your have correctly managed and configured your alternate schedules.
Step by Step Process
Start by creating a new asset record. You can either create your new asset record directly in NetAsset or you can create your new asset via CSV import. The example below will walk through the process of creating a new asset directly in NetAsset.
Start by navigating to NetAsset > Create New Assets > Create Asset. On the blank asset record, start by filling out the fields in the Primary Information and Schedule Information section as desired. However, under the Schedule Information section, do not assign a value to the "Capitalized Asset Value at In-Service" or "Accumulated Depreciation at In-Service" fields. This is because, we do not want to assign this asset any value for book purposes, as this asset will be tracked for tax purposes only.
Next, continue by filling out the fields on your desired alternate/tax subtab. Once the asset type is selected, NetAsset will automatically set your "Capitalized Asset Value at In-Service" field on this subtab as zero. Correct this field with the asset's appropriate tax value. Additionally, ensure to update the "Depreciation Method" to the appropriate tax depreciation method. Add any additional information in the Tax Information section as desired.
If you are using the Tax Complete NetAsset add-on to determine your asset's depreciation method, section 168, and section 179 deduction, you can leave those three fields blank. Instead, you will need to work through the Apply Tax Years process to generate these fields after year-end. Note that you will still have to manually enter your "Capitalized Asset Value at In-Service."
Once all fields are filled out as desired, proceed with Saving your asset record and Generate your Schedule. Note that this process will only generate the primary schedule and not any alternate schedules. Even though the asset value on the primary schedule is set to zero, the schedule still must be generated.
Once the primary schedule has finished generating, notice how it only consists of a single, zero-valued schedule line.
Next, proceed by generate your alternate/tax schedule by clicking on "Create Alt. Schedule."
On the next page, ensure the correct "Alternate Depreciation Schedule" is selected and then proceed by selecting "Generate Schedules." More information on generating alternate schedules can be found in this article.
Once your alternate schedule is finished generating, your tax schedule should look something like this:
Lastly, with both the primary and tax schedule generated, we can complete this process by placing the asset in-service.
Once the asset has been placed in service, you can observe that the asset status changed from "Pending" to "Fully Depreciated."