A new update for Sage Fixed Assets, version 2018.1, is due late January or early February 2018, and will include changes based on The Tax Cuts and Jobs Act recently passed by Congress. The Tax Cuts and Jobs Act of 2017 introduced a significant amount of change for income tax regulations. The changes include new rules applying to the treatment of fixed assets.
Sage Fixed Assets 2018.1 will be enhanced to include (per the Sage Knowledgebase):
- Bonus Depreciation (Section 168(k) Allowance): In general, for qualified property acquired after 9/27/2017 and placed in service by 12/31/2022, the 50% bonus rate is increased to 100%. After 2022, the rate is phased out over the following years.
- The Section 179 Expense expands for business property placed in service in taxable years beginning on or after 1/1/2018 to $1,000,000.
- Regarding the Recovery Period for Real Property Effective for property placed in service 1/1/2018 and later:
- The 15-year qualified leasehold, retail, and restaurant improvement property classes are eliminated
- A 15-year recovery period is assigned to qualified improvement property, assuming a technical correction is made.
Additional rules include:
- Auto limits increased for vehicles placed in service after 12/31/2017. 2017 current year limits on depreciation for vehicles is $3,160, with an additional allowance of $8,000 for the 168 Allowance. The new limit will be $10,000 with no change on the 168 Allowance.
- Depreciation of Farm Property placed in service after 12/31/2017:
- A decrease in the 7-year recovery period for new farming machinery and equipment to 5 years.
- Elimination of the rule requiring use of the 150 declining balance percentage on property used in a farming business. This means that the 200% declining balance can now be applied.
- Like-kind exchange treatment is no longer allowed for depreciable tangible personal property, and intangible and non-depreciable personal property. Like-kind exchanges are now limited to real property.
The above information is expected to be in the final version of Sage Fixed Assets 2018.1, but is subject to change up to the release date. Please consult with your financial advisor before implementing any new tax rules or regulations.