NetAsset - Tax Engine: Unsupported Scenarios
Tax Complete is intended to support tax calculation for small to mid-size companies. When evaluating tax complete for your business, please verify the following use cases are not required as they are not currently supported:
Tax Rules
| Category | Rule | Tax Complete Treatment |
| Section 168 | 168 applied by asset class | Tax Complete applies section 168 bonus depreciation to the entire group of assets. Some companies choose to elect section 168 by asset class. There is no way to automate that in Tax Complete currently. You have to do a CSV import to override the 168 percentage by asset after running the tax engine. |
| Tax Books | States | US States each have their own laws for what depreciation methods and bonus applications are allowed. Tax Complete does not provide state specific compliance. It supports the general "non-conforming" state book where bonus depreciation is different/disallowed and the methods are still MACRS. States with unique depreciation methods (often called "add-back") for tax depreciation are not supported (North Carolina, Florida, Minnesota, Connecticut). |
| Tax Books | ADS | Not supported through Tax Complete. Planning to add support in 2027. We don't have the ability to auto-populate with the correct useful life, so you will need to do a CSV upload to populate this alternate schedule with the straight line half year method and correct useful life. |
| Tax Books | ADS Mid Quarter | No out of the box option for these depreciation methods. You will need to create them as a table based depreciation method. Copy the MACRS methods for a template where you have one method per quarter. |
| Tax Books | AMT 150% | Not supported for assets placed in service prior to 1998. For assets placed in service after 1998, use the OOTB 150% methods and the 150 MACRS selection on the tax year record. Form 4626 is not supported. |
| Tax Books | International | Tax Complete is built to support auto-population of methods for US tax standards. International tax methods are not promised as out of the box features and are not supported through the auto-population of methods through the tax engine. International methods need to be evaluated to deem how they can be created and then populated on asset alternate schedules via a CSV import. |
| Tax Books | Different Tax Lives by Taxpayer | Tax Complete does not support automatically assigning different useful lives to the same asset type or tax classification based on Taxpayer. Scenarios requiring different lives by taxpayer may require separate asset types, manual alternate schedules, or CSV imports |
| Luxury Auto | §280F(b)(2) recapture | If the answer to the test for business use > 50% changes, this triggers a recapture calculation for depreciation. This is not supported in Tax Complete. |
| Luxury Auto | Luxury Auto Vehicles with under 50% of qualified business use | Should be depreciated using ADS straight line over 5 years with no section 179 or section 168 bonus depreciation. Tax Complete does not support auto-population for this use case. You have to manually fill out the alt schedule. |
| Luxury Auto | Luxury Auto Vehicle business use < 100% and > 50% | Tax Complete does not take the exact percentage of business use into account in the depreciation formula. Tax Complete assumes 100% business use if the "Used More Than 50% in Business" box is checked. |
| Luxury Auto | Rev. Proc. 2019-13 safe-harbor | Tax Complete uses the Rev. Proc. 2019-13 safe-harbor method that lets you keep taking regular MACRS deductions in years 2–6 for Luxury Auto. |
| Leased Assets | IRC §280F(c) | NetAsset does not cover tax treatment for leased vehicles or any leased assets. |
| OBBBA | 2025 Placed in Service date discrepancy for 19 day window | Technically the 19 day period at the beginning of the year that gets 20% bonus depreciation would apply to any assets that are acquired before 1/20/2025 and placed into service after. Tax Complete uses the in-service date for this cutoff, so you need to manually edit the section 168 bonus applied to assets with this use case. |
| QIP | QIP Straight Line Depreciation | Qualified Improvement Property (QIP) is identified on an asset-by-asset basis and must be depreciated using a straight-line method in all tax books (15-year for federal GDS, 20-year for ADS; state treatment may vary). Tax Complete assigns a single default depreciation method per tax class and does not distinguish QIP from other 15-year property, which defaults to 150% declining balance. After applying tax rules, identify any QIP assets and manually update their depreciation method to the appropriate straight-line method. Section 168 and 179 amounts are unaffected. Re-applying tax rules will reset the method so do the override after running the tax engine. |
Setup and Day to Day Processes
| Implementation | Cutover Method | Table line depreciation methods (aka all the MACRS methods out of the box) cannot use the cutover method at go-live. The asset's alternate schedule has to be entered with the original in-service date and original asset value to have the correct yearly depreciation amount. Note you can still use the historical method for the primary schedule if desired. |
| Implementation | Monthly and Quarterly Tax Schedules | Not supported. Tax Complete uses table based depreciation methods that create one schedule line per year. The out of the box methods cannot be used to run an annual calculation and then split the schedule lines into other cadences such as monthly or quarterly. |
| Implementation | 4-4-5 and 52/53 week calendars | Not supported. Tax Complete schedules are annual and snap to the first day of the month, not the first day of the custom period. Off periods, such as a Sept 28-Sept 27 year has to either start on Sept 1 or Oct 1 for the tax schedules. This can be forced by creating tax years with the Oct 1 start date and then populating the tax year on the alternate schedule, then running the tax engine. Note reporting will need to be run from the same dates as the tax years (Oct 1 - Sept 30) regardless of the actual calendar used. |
| Splits | Tax-Only Asset Split | Tax Complete does not support splitting an asset for tax purposes only. Asset splits occur at the asset record level and affect both book and tax schedules. A single book asset cannot be separated into multiple tax assets without also splitting the underlying asset record. |
| Revaluations | Tax-Only Asset Revaluations | Tax Complete does not support revaluing an asset for tax purposes only. While revaluations can be ignored on the tax alternate schedule via the global settings, you cannot trigger a revaluations for only the tax schedule. |
