Recording Section 179 Expense
In order to record Section 179 expense, you will need to make a "FA Journal" entry. The entry will be very similar to the entry that was made to record the acquisition cost of the asset except that you will enter the Section 179 amount as a negative number. In effect, this is a negative acquisition cost entry. Be sure that you make the posting date of this entry the same as the posting date of the original acquisition entry.
In order to track your Section 179 expense, is recommended that you use a "Document No." that is specific to this sort of entry. Otherwise, there is no differentiation in the system between Acquisition Costs and Section 179 Expense.
Using the examples above, if a Section 179 expense of $5,000 was recorded and posted, the Tax Depreciation calculated for 2004 would be $2,000 (20% of a net acquisition cost of $10,000).
Bonus Depreciation should be handled in the same manner as the Section 179 expense.
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