Assets Whose Depreciation Starts in Later Tax Years 

Use

Sometimes you enter an asset transaction whose depreciation start date falls in the tax year after the transaction’s value date (for example, the date of an asset’s purchase). This, however, has no effect on the calculation of depreciation for property tax purposes. You can start calculating depreciation starting from the asset’s value date.

The Property Tax Report automatically calculates these assets’ tax book values and tax evaluation amounts correctly, as described in the following example.

Example

You purchase a workbench on October 31, 2005. Its balance sheet depreciation does not start until three months later, on February 1, 2006. For the purposes of property tax depreciation, however, this fact is irrelevant, and October 1, 2005 is deemed the depreciation start date.

In January 2006, you prepare the 2006 tax declaration (which shows your assets as at January 1, 2006). The Property Tax Report includes the workbench in the tax declaration, and allows for three months’ depreciation.