"nish" <nisha[at]nunya.org> wrote
- quote -




Hmmmm. Seems to me that your accountant is being more thorough than maybe
they need to be. Asking for a copy of the purchase receipt - at the time
the asset is sold - is silly. Asking for it in the year of purchase makes
sense, then you trust your depreciation schedule to be correct from then on.

And if you know he wants sales information, create a file called "Give to
accountant" and stuff it full of crap and hand it to him in January.




- quote -



The purpose is to compute the correct gain or loss on the disposition of the
asset.







--
Paul A. Thomas, CPA
Watkinsville, Georgia

--
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"Paul Thomas, CPA" <paulthomascpapc[at]bellsouth.net> wrote in message
news:ul9wk.23244$Ep1.3563[at]bignews2.bellsouth.net...
- quote -

That is the easy part and we did it. That wasn't part of my time
calculation.

The hard part (for us) was having to then repeat the process in the tax
software and set up a reminder to proofread the tax return for that detail
when the accountant sends it back. The accountant will independently
duplicate all of that effort in his own tax software and will also play a
game of "go fetch" asking for documentation to establish purchase and sale
information for each individual asset. Finding hardcopy and sending that
to him all takes time and creates a lot of waste of human effort for no
gain.

Okay, it's the law, and like lots of laws it serves a bureaucracy and not
any purpose of efficiency.

nish

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Arthur Kamlet wrote:
- quote -

Indeed. Where do "I" look for them? In my files, of course. And not
on a 4562 which is not filed with the return.

Oh,you THOUGHT that I used the Taxwise deprciation calculations based on
first year's computation and automatically carrying them forward? No,
I have my own ways of doing things. The Lunsford way.

ChEAr$,
Harlan

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"nish" <nisha[at]nunya.org> wrote
- quote -




It's a five minute journal entry at most.

Credit your fixed asset account for it's historical cost
Debit the accumulated depreciation account for the depreciation taken on
that item over the years
Debit cash for the sales proceeds
and
Debit or credit for a loss or gain on the sale of the asset.




If you threw the asset in the dumpster, it's the same entry without a cash
transaction.



Why do you need to do this?

1) Because the law demands a better accounting of what you're doing.
and
2) Because you need good records for property tax computations.
and
3) Because your books need to accurately reflect your assets, liabilities,
equity, revenues and expenses.




If you have an accountant, use their expertise and heed their guidance.




--
Paul A. Thomas, CPA
Watkinsville, Georgia

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Paul Thomas, CPA" <paulthomascpapc[at]bellsouth.net> wrote in message
news:2BQvk.21799$IB6.14738[at]bignews8.bellsouth.net...
- quote -

Form 4562 is there carrying summary information that is generated by a third
party product that manages the fixed assets. I was only focused on what
methods are allowed for *disposal* of fixed assets. It would have been
nice if summary entries could have been generated on 4562 (or anywhere else)
for all of the assets being sold instead of having to manually recreate them
all one at a time. Lots of work there for absolutely nothing gained.

In the example I gave, the assets are being sold for nearly nothing ($175),
but the heavy processes involved with disposing them are going to cost
thousands (in time for the coming to correctly follow processes in the
software for disposal, and in their time to review the tax return detail
filled in by accountant). It's just one of those very frustrating
situations where process and regulation kills human productivity for no
realized gain for the government.


- quote -

No no no Paul. Nish is on a path to trying to understand what the process
is so that he can a) provide relevant and correct information to the
accountant; b) provide an efficient process for generating the return; c)
understand what the heck is written on the forms that come back; d) ask
half-intelligent questions when there are choices about ways to do things.

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In article <MrWvk.22256$XT1.7146[at]bignews5.bellsouth.net> ,
Harlan Lunsford <hlunsford[at]bellsouth.net> wrote:
- quote -


Sure. But where's he going to pick up his prior depreciation
and current year depreciation if not from the depreciation
schedules? And where do you look for those?
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

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nish wrote:
- quote -

Such segregation of asset sales on form 4797 is required. And that's
the way it goes.
- quote -

But in the year of sale, we don't use a form 4562.

ChEAr$,
Harlan Lunsford, EA n LA

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"nish" <nisha[at]nunya.org> wrote
- quote -


Yes.





- quote -




My fear here is that "nish" is on a path to ditch his accountant and have
the book accounting magically flow to the tax software. If that's the case,
then I highly recommend not trusting the assigned tax lines from the
software to drop all the required details into the tax return. It just
doesn't work that easily.





--
Paul A. Thomas, CPA
Watkinsville, Georgia

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

I'm looking at some work that someone did in Lacerte and scratching my head
wondering if this level of detail is needed. Company sold four of its
assets, for a gain of $175. The fixed asset software that calculated this
value correctly dealt with the depreciation to arrive at that gain. The
gain was journaled to an "other income" account for "capital asset
gains/losses" on the books of the Company and that account is brought into
Lacerte as "Other Income".

What the person working with this data did is delete the other income and
instead go to Schedule D / Form 4797 and manually recreate each asset that
was sold. The depreciation for each individual asset, sale price, cost
basis, etc, is entered manually. And then Lacerte calculates the same $175
gain, given the same set of facts, and produces a Form 4797 P2 showing the
detail for each asset.

Maybe this shows great diligence, but my question is whether this level of
asset-by-asset detail is *required by law*. It seems like an awful lot of
work to have to manually recreate your fixed asset system data in the tax
software whenever you sell an asset. It would surely be nicer to just show
this as an other income item and let them audit if they don't believe the
number.

Is the issue about being able to sell at a capital gains rate, or is the
Schedule D needed in order to balance out other things on the return
concerning fixed assets?

Any insights on how to aggregate this and make it a bit more efficient?

nish


========================================= MODERATOR'S COMMENT:
I would have thought the asset would have been created in
association with form 4562. Yet form 4562 seems to be missing in action.
Not a good sign. Recreating the 4562 to conform with previous
depreciation schedules seems to be in order first.

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >