A. If you are planning to enter the detail for the adjustment calculation on the depreciation worksheet included in the deductions section of the Rental and Royalty worksheet, you'll need to also use the Ratio Allocation section of the Special Allocations worksheet in the Partners category. On the special allocation worksheet, enter a ratio ID number, the partner number, and the percentage to be allocated to the partner (i.e., 1.00). Then on the Depreciation worksheet, just enter the ratio ID number in the "754 Ratio" field (Under the General section in the Options form 1065, 1120 and 1120S heading.
Your entry in the "754 Ratio" box tells the System that the depreciation is a 754 adjustment and also how to allocate it.
A. There are two ways to enter the amount if you are not using the Depreciation worksheet.
If you are entering depreciation totals on the Depreciation Totals Only worksheet, enter the amount in the Section 754 depreciation field on that worksheet. Otherwise, enter the amount in the Section 754 depreciation field on the Rent and Royalty worksheet. To specially allocate amounts entered for Section 754 depreciation entered directly onto the Rent and Royalty worksheet, use the allocation codes on the Special Allocation Detail section of the Special Allocation worksheet. Please see the help for the Special Allocation worksheet for further explanation of these methods.
A. Re-enter the amount on the Schedule M-1 worksheet in the Section 754 Depreciation field. Use allocation code 7687 on the Special Allocation worksheet if you need to specially allocate the tax/book adjustment.
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