The Depreciation Calculation is Incorrect in a Tax Return

Symptom

The tax preparer has a tax return where they feel the depreciation calculation is incorrect. It may have too large of a depreciation deduction.

Possible Cause

When an amount has been entered for prior year depreciation, and the amount is less than the amount calculated by the program, the difference is added on to the current year depreciation. The prior year depreciation amount may be incorrect due to a conversion from other tax software.

Resolution

1. Press CTRL+N to open the "All Forms & Schedules, Depreciation" screen.
2. Double click the business activity to open the 'Business Activity Asset" window.
3. Double click the asset that is generating too much depreciation.
4. Click the Depreciation Tab.
5. Enter the correct amount of prior year depreciation in the Adjusted Depreciation box.
6. If the Adjusted Depreciation amount is still incorrect, enter the correct amount of depreciation in the Depreciation Override box.