How does screen 4562 (Depreciation and Amortization) work? Do screens 6-9 work with the 4562 detail screen?
Generally, you should use the 4562 detail screen to enter assets rather than the override screens 6 - 9. Use screens 6 - 9 as override screens if you complete your depreciation outside of Drake and wish to enter it directly on the form. Do not duplicate entries on an override screen and on the 4562 screen.
Multi-form codes on screen 4562 connect to the instance of the schedule selected in the For field. When pointed to a Schedule C, multi-form code 2 indicates the second Schedule C in View mode.
In the case of Schedule E, the multi-form code refers to the properties listed on Schedule E. As there are three properties on each Schedule E, multi form code 2 would be the second property on the first Schedule E, and multi-form code 4 would be the first property on the second Schedule E.
Where the asset appears on Form 4562 depends on how it is entered on screen 4562. Look at the form in View mode and see what each section reports. For example, if you want a figure to appear on line 19h of Section B of Part III, what does that section require? Section B is Assets Placed in Service During the [Current] Tax Year Using the General Depreciation System. Line 19h is Residential Rental Property. So, in order to get a figure to that line, the date placed in service must be in the current year and it must have a method of ARR (life of 27.5 years).
For group sales, enter each depreciable asset of a group sale in a separate 4562 screen. For the first asset of a group sale, in the If sold area complete the Date sold, Group sales number, Group sales price and Group expense of sale fields of this box. The Property Type is located under the description at the top left of the screen, and will also need to be completed. For each subsequent asset, only the Date sold, Property type, and Group sales number fields are required
To stop depreciation on an asset, enter in a date sold under the If Sold area (if it was sold) or enter a date taken out of service IF NOT SOLD under the Additional Asset Information section of the 4562 screen. If you enter in any further information in the If Sold portion, such as the property type, the software will generate a 4797, Sale of Asset.
You cannot generate a Form 6252, Installment Sale, from the If Sold portion of the 4562 detail screen.
- You cannot take depreciation for an asset bought and sold in the same year, or over a period of less than a year.
- Only one screen 6, 7, 8 or 9 per Form 4562 is allowed per return. No additional statement is produced if a second screen is entered and pointed to the same business/return/main form.
Starting in 2018, information entered on screens 6-9 is not used for Section 199A UBIA and QBI calculations. If the basis of these assets should be included in the UBIA amount, an adjusting entry must be made on the K screen > Other Information tab > line X to report the UBIA amount, as applicable. See Related Links for details on UBIA and screens 6-9.