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How to undo 168 allowance

Created on  | Last modified on 


This article provides steps to remove or undo 168(k) bonus depreciation on assets by changing their depreciation method.


If an asset is using a 168 method (MA, AA, SB), the asset cannot be disposed of in the year of service. The system will produce the message: Invalid Disposal Date. Assets Claiming a 168 allowance cannot be disposed of in their PIS year. To use the disposal date entered you must change the depreciaiton method for all books to a non-168 method.


CAUTION: Use caution when working with the below product functionality. Always create a backup of your data before proceeding with advanced solutions. If necessary, seek the assistance of a qualified Sage business partner, network administrator, or Sage customer support analyst.

The Depreciation Method determines if an asset uses 168(k) Allowance. To remove the 168(k) Allowance, change the Depreciation Method to a non-bonus method.

To change an individual Asset:

  1. Go to the Asset Detail view of the asset to change.
  2. Manually key in the appropriate non-168(k) Depreciation Method.
    Example: Change MA200 to MF200 to remove bonus
  3. After changing the Deprecation Method, answer Yes and select Placed-in-Service date.
  4. Re-calculate depreciation on the asset:
    1. While in the Asset Detail view, go to Depreciation, Depreciate.
    2. Leave the group on (where ‘X’ is the system number of the asset).
    3. Select the desired Book(s), enter the desired Date, click Execute.

To change a group of assets:

  1. If you need to change all assets for a given Fiscal year proceed to Step 2. Otherwise, Create a group containing only the assets to be changed:
    1. Highlight assets in Asset List.
      Note: There are limits on creating a group this way. If you need to create a larger group, see How to create a group
    2. Go to Asset, Save as Group, give the group a Name, click OK.
  2. Go to Depreciation, 168 Allowance Switch.
  3. Select the Group, select the Book(s).
  4. Enter the Fiscal Year End the assets to change were Placed-in Service.
    Note: The 168(k) Allowance switch is a mass change of the Depreciation Method. It will only change qualifying assets Placed-in-Service in one Fiscal year at a time. Qualifying assets are Personal Property (P) using a MACRS depreciation method (MA/AA/SB) and are not Disposed or Transferred.
  5. Under Allowance Percentage select No Allowance.

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