HowardSoft
TEXT SIZE:
Print Close
Use smallest TEXT SIZE setting when printing.

TECHNICAL CHANGE NOTICE TCTP0303

for 2003 Edition of HowardSoft's Tax Preparer®

SUBJECT: ELECT OUT choices on 4562 not properly reflected in worksheets (Partnership ONLY)


Problem. On the worksheets for lines 19a, 19b, 19c, 19d, 19e, 19f, 20a, and 20b, the answer to "Elected out for THIS class" is not controlled by your answers to the ELECT OUT questions on screen 3 of Form 4562. Instead, the answer is unpredictable, leading to the unpredictable inclusion or omission of the special 30% depreciation allowance on the worksheets.

Perspective. The problem exists only if all three of the following conditions exist:

  • You are using the Partnership Edition (for Form 1065 returns).
  • You are depreciating property placed in service during 2002.
  • You are not using copy 1 of Form 4562 (the copy that supports Form 1065 lines 16 and 20).

Problems with Tax Preparer 1040 indicate operator error

The problem described here exists only for Form 1065 returns. There is no problem with any Form 4562 used for any Form 1040 returns. If you find that the answer on the worksheet does not agree with the answer on screen 3 of Form 4562 for a 1040 return, it means that you did not view the worksheet after having answered the questions on screen 3 of Form 4562. To correct the problem, merely itemize to the problem worksheet and it will automatically recalculate using the appropriate answer on screen 3 of Form 4562.

Workaround. You may be able to change the calculation on the worksheet by the following procedure:

  • If the worksheet shows No for the "Elected out..." question while the corresponding answer on screen 3 of Form 4562 is set to Yes, you can ensure the proper calculation by answering Yes to "Ineligible property?" on the affected worksheets.
  • If the worksheet shows Yes for the "Elected out..." question while the corresponding answer on screen 3 of Form 4562 is set to No, you may be able to eliminate the problem by exiting Tax Preparer, restarting the program anew, then accessing ONLY the affected copy of Form 4562 directly through the Forms Menu (by choosing 3 – ENTER Forms/Schedules – from the menu for PREPARE 1065 Tax Returns).

Both of these workarounds are unstable in the sense that if you access an affected worksheet at a later time, the answer may be reversed. You should therefore refrain from itemizing to the worksheets once they have been repaired through a workaround.

Solution. The problem is eliminated by using release pa2003.01b or later. CAUTION: For previously affected returns you must itemize to each affected worksheet anew after installing the new release and checking your answers on screen 3 of Form 4562.