Dynamics Community Forum Thread Details

Internal Depreciation vs Federal Tax Depreciation

It is my understanding that you can only use Section 179 deductions on your Federal Tax book and must use GAAP depreciation on your internal book. This means when adding an asset you must capitalize it via a trigger account of capital item check box so it can be imported into your internal book. Then in the federal book you would access the ITC button and enter the amount in the Section 179 field.

However, only my internal book will hit the GL accounts: asset account, depr. expense, accumulated depr. expense. This is all fine for producing my internal P&L because I can just access the GL accounts. But how do I produce a P&L for tax purposes since for tax purposes you don’t use the depreciation accounts when using Section 179? And the item was not expensed to an expense account since you have to change the PURCH account to the FA Clearing account when in PM or Receiving.

Thanks

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