I have a 10 year straight line amortization entered to account for the cost of my franchise buy-in amount (10 year contact term). For some reason it is showing as $0 for the first year value however. Is there a way to fix this?
Have you checked the worksheet in Forms Mode?
Is it only showing $0 in one of the interview screens?
Here is what it is saying in forms mode. It shows the initial investment and the 10 year terms, but $0 across the board.
I'm not sure why it does not show $8,450 for this year?
I entered an asset for amortization in my test copy of TurboTax Business and it appeared on the Depreciation and Amortization Report correctly.
Where are you entering this in the program?
Depreciation of assets under the Deductions section.
I picked other as depreciation type, entered the amount, picked "Z" asset type, spread out over multiple years, and then amortization as depreciation type with a 10 year asset class and a straight line depreciation.
I can only suggest contacting Support. I can't seem to get the proper result either with that code and a couple of others.
When looking at the depreciation schedule I'm forms mode, I noticed there was an indicated error for the length of the amortization. I removed the manually entered term length, and the option for straight line, and just left the dollar amount and the term length that was selected from the options on the TurboTax drop down menu, and everything worked. It appears the system was confused with having two length of term amounts entered, even though they were the same.
Questions:
How do you get a land value of $100 on a franchise fee?
I note you have a cost of $10,00 under the depreciation basis column. That's not right at all.
Overall, it looks to me like you entered your franchise fee as a depreciable asset, and not as an amortized asset. Here's how to do it correctly.
- In the Business Assets section select the Add and Asset button. (go straight to the asset summary if presented that option)
- Select Intangibles/Other Property, then continue.
- Select Amortizable Intangibles, then continue.
- Describe it as something like "10-year franchise Fees". Then enter the amount, and the start date of the business.
- Select "purchased new", then "100% business use", enter the business start date (again), then continue.
- Code section is 197:Franchise Fees/Other, then continue.
- Useful Life in Years is the length of time the free covers (10 years I presume?), then continue.
- You can "show details" if you like. Then continue, and that does it
@Carl wrote:I note you have a cost of $10,00 under the depreciation basis column. That's not right at all.
It's correct, @Carl. There are not two separate columns for depreciation and amortization; the figure for both appears in the depreciable basis column.
@Carl wrote:How do you get a land value of $100 on a franchise fee?
It's not the land value, "100" is the percentage of business use.
@Anonymous_ It's not correct on his copy. Take a look. Column 9 is the depreciable basis. There's nothing in that column. It's blank. So as far as the program is concerned, there's nothing to amortize or depreciate. (Before, I incorrectly labeled that column I think)
I was able to correct the confusion on the software side of things by filling out the information in form mode. Everything reads correctly now.
@Carl wrote:
@Anonymous_ It's not correct on his copy. Take a look. Column 9 is the depreciable basis. There's nothing in that column. It's blank.
It is not correct on his copy (according to the screenshot), but he was able to solve that problem and reported that in his post (which was just above your post):
When looking at the depreciation schedule I'm forms mode, I noticed there was an indicated error for the length of the amortization. I removed the manually entered term length, and the option for straight line, and just left the dollar amount and the term length that was selected from the options on the TurboTax drop down menu, and everything worked. It appears the system was confused with having two length of term amounts entered, even though they were the same.