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How to reconcile the 4562

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Summary

This article provides group definitions you can create and run using the Tax Expense report to determine which assets appear on each line of the 4562.

Resolution

This article is a GENERAL GUIDELINE to determine if the correct information appears on the 4562.




In Sage Fixed Assets:

Create groups in Group Manager using the criteria for each line below, and the run the Depreciation Expense report using each group. See How to create a group.

Note Depreciation Methods:

  • MACRS General Depreciation (GDS) methods: MA, MF, MR, MI, MT
  • Alternative Depreciation System (ADS) methods: AD, AA, RM, RH
  • Accelerated Cost Recovery System depreciation (ACRS) methods: AT, SA, ST
  • Straight Line depreciation (GAAP) methods: SL, SF, SB, SD, SH, RV
  • The Declining-Balance depreciation (GAAP) methods: DB, DC, DD, DE, DH, DI
  • The Sum-of-the-Year’s Digits depreciation (GAAP) methods: YD, YH, YD

For asset information to appear for a year-end of December, the Current through date will need to represent this date.

Line 2 Tax Expense Report - Acquired Value
  • Placed in Service is between 1/1/2022 and 12/31/2022
  • Tax Book 179 Qualified? is T

Line 14 Tax Expense Report - 168 Expense

  • Prop Type is P
  • Prop Type is R
  • Placed in Service is between 1/1/2022 and 12/31/2022

Line 16 Tax Expense Report - Current YTD

  • Prop Type is P
  • Prop Type is R
  • Sort by Depreciation Method: Depreciation Method is Non-MACRS

Line 17 Tax Expense Report - Current YTD

  • Prop Type is P
  • Prop Type is R
  • Placed in Service is less than 1/1/2022
  • Sort by Depreciation Method: Depreciation Method is MACRS GDS

Line 19 Tax Expense Report - Current YTD

  • Prop Type is P
  • Prop Type is R
  • Placed in Service is between 1/1/2022 and 12/31/2022
  • Depreciation Method is MACRS (MF, MA, MT, MI, MR)
  • Sort by Estimated Life

    Note: If taking 100% Bonus Depreciation please note your total will NOT appear on line 19. The 168 amounts will appear in Line 14. If it is listed property (A, T, Q, S) it will appear in Line 25
    Note: Part III, 19 i Nonresidentaial real property must meet three conditions:
    • Property type R
    • Depreciation method MF100
    • Estimated life 39 years

Line 20 Tax Expense Report - Current YTD

  • Prop Type is P
  • Prop Type is R
  • Depreciation Method is AD
  • Depreciation Method is AA
  • Depreciation Method is RM
  • Depreciation Method is RH
  • Placed in Service is between 1/1/2022 and 12/31/2022
  • Sort by ADS life

Line 23 Manual Entry - §263A capitalized inventory

  • In the Report Dialogue for the 4562 box, Choose the Additional Information button at the bottom. Manually enter the amount in Part IV-§263A amount - capitalized inventory

Line 25 Tax Expense Report - 168 Expense

  • Prop Type is A
  • Prop Type is Q
  • Prop Type is T
  • Prop Type is S
  • Placed in Service is between 1/1/2022 and 12/31/2022

Line 26 Tax Expense Report - Acquired Value and Current YTD

  • Prop Type is A
  • Prop Type is Q
  • Prop Type is T
  • Prop Type is S
  • Placed in Service is less than 1/1/2022

Line 42 Tax Expense Report - Current YTD

  • Prop Type is Z
  • Placed in Service is between 1/1/2022 and 12/31/2022

Line 43 Tax Expense Report - Current YTD

  • Prop Type is Z
  • Placed in Service is less than 1/1/2022


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Related Solutions

 Depreciation information on the 4562 - Depreciation and Amortization Report incorrect or missing