Put a GAAP book on an asset, set the life it depreciates over, and pick its method.
Books are created one asset at a time here, at the moment you add an asset from the Book depr. tab, or in bulk by an import that carries book columns. There is no bulk setup screen.
Set it up as you add the asset
If the asset does not exist yet, start from the return's Book depr. tab and click Add asset. The form opens on its GAAP Book side with the same fields described below, and Add asset creates the asset and its book together. The tax side is left for the tax preparer. See The Book depr. tab.
The rest of this article covers an asset that is already on the return.
Create the book
Open any asset. Above the depreciation detail there are two tabs, Tax and GAAP Book. On an asset with no book yet, the GAAP Book tab says:
GAAP book not set up for this asset
Will copy placed-in-service date, salvage=$0, convention=full-month
[ Create GAAP book ]
Click Create GAAP book. The tab confirms "GAAP book created. Edit the fields below and save."
The book exists from that click. It is created with a useful life of 60 months, salvage of $0, straight-line, full-month, and a blank book in-service date. It already carries a green "Active" badge, already computes figures, and already appears on the Book depr. tab and the book reports at that 60-month life. Creating is not a preview, so set the life before you move on.
Fill in the fields
Set Useful Life (Months). 60 for five years, 84 for seven, 468 for thirty-nine. The field arrives at 60, so change it unless 60 is right for this asset. Months rather than years is what lets a life sit anywhere you need it.
Pick a Method. The choices are Straight-Line, 200% Declining Balance, 150% Declining Balance, Sum-of-Years-Digits, MACRS 200% DB, MACRS 150% DB, MACRS Straight-Line, and MACRS ADS. New books arrive on Straight-Line.
Pick a Convention. Full-Month, Half-Year, Mid-Month, or Mid-Quarter. The non-MACRS methods compute on Full-Month; the MACRS methods need one of the other three.
Set Salvage Value, if there is any. It defaults to 0. The MACRS methods do not use salvage, and the panel says so when one is entered.
Leave Book In-Service Date blank unless it differs. Blank means the book follows the tax placed-in-service date, including later corrections to it, and the field says which date it is using. Fill it in only to pin the book to a different date.
Click Save GAAP book.
Picking a MACRS method for book
The MACRS book methods are for firms that keep one schedule and report the tax numbers as their book numbers. The book computes from the same IRS percentage tables as the tax side, so with no Section 179 or bonus in play the two match.
Two things a MACRS book needs to line up:
A MACRS convention. Half-Year or Mid-Quarter for personal property, Mid-Month for real property. A MACRS method saved with Full-Month shows an error naming the conventions it accepts instead of figures.
A life that matches a MACRS recovery period. 36, 60, 84, 120, 180, or 240 months for personal property; 330, 360, 468, or 480 for real property. Any other life cannot reach a table, and the panel says which life it could not match.
The book copy is independent of the asset's tax schedule. Changing the asset's tax method later does not change its book, so a firm keeping the two in step edits both.
The figures below the form
Three figures sit under the form, headed Book Depreciation — Tax Year and the return's year:
Current Year, with the month count and the monthly rate behind it, as in "9 months @ $1,033.33/mo".
Accumulated, the total through the return's tax year.
Book NBV, cost minus accumulated. It turns amber and reads "Fully depreciated" once there is nothing left to depreciate.
Beneath those, the panel lists the notes behind the numbers: the method and convention, the basis with its cost-and-salvage arithmetic spelled out, the monthly amount and how many months were charged, whether a book in-service date is overriding the tax one, and what a disposal did to the year.
They recompute on save, and they were already there the moment you created the book.
If salvage is higher than cost
On the non-MACRS methods, the app saves the record, then replaces the three figures with "Book depreciation calculation error: Salvage value exceeds original cost." Lower the salvage value and save again to get figures back. The MACRS methods do not use salvage, so they never hit this.
If the two dates drift apart
Set a Book In-Service Date and the book stops tracking the tax one. Whenever the two differ, the tab shows an amber note naming the book date that is overriding the tax date, so a date you pinned months ago does not quietly outlive the reason you pinned it.
Remove a book
Click Delete GAAP book and confirm. The prompt spells out what it does: it removes all GAAP depreciation settings, and tax depreciation is not affected. The asset keeps its full tax life and only disappears from the book grid and the book reports.