Auto limitation on an asset and not on another asset. Can I influence this?

Hello,

I'm working on converting from Lawson to Sage and have noticed that in our State book (Idaho doesn't allow bonus depreciation on autos) that in 1 company of ours the State book follows exactly MF200 and doesn't limit depreciation to the limitation in Publication 946. In the other Company it is capping depreciation to the limitation. I have both autos set as property type A for Automobile, MF200 and half year convention. Is there something I should be doing to make sure depreciation is capped to the limit in Publication 946? I'm putting screenshots below of depreciation projection for both assets as well as the table showing the limit from Publication 946.

  • Hi Lauren Poole,

    The Sage Fixed Assets application is following the rules per IRS guidelines on the Auto luxury limits when using the depreciation method MF200 with property type A.

    For the asset added with service date in 2018 the max depreciation limit is $10,000 when using MF200 (opting out of taking the 168 allowance). The regular depreciation is below the max limit thus the application takes the lesser of the two available amounts.
    Here is the first year calculation: $25,580.84 / 5 x 200% x 6/12 = $5,116,17. 
    The application will take the normal depreciation over the Auto limit as the limit is higher.

    For the asset added with a service date in 2011 the max limit for depreciation using property type A is $3,060. As the regular depreciation calculation is higher than the max limit the application will take the limit as the depreciation in this case.

    The max luxury auto limits are different based on the year the assets were placed in service so this cannot be compared as being the same even with the property type being A.

    If you need access to the full chart that shows the max limits where you use MF200 you can find it inside the Sage Fixed Assets application via Help menu, Help topics, Search tab, In the box labeled Type in the word(s) to search for: type in Automobile (Type A), click list topics. When the topic list appears select the topic by same name as the search term and click Display button.

    ~Lovisa

  • Lovisa, that makes total sense. Thank you for your answer and telling me where I can find this chart in the help menu!

  • My Pleasure as this can be confusing at times.