Illustration: Selected “Yes” in question "It's a small business entity that has chosen to use the simplified depreciation rules?" under Capital Allowances section, but the Depreciation Expense line item (Label 5K) does not appear in the tax return.
Explanation:
If the trust is using the simplified depreciation rules (chosen YES under Label 50 under Depreciation tab), then the user needs to fill in the line item "Tax related depreciation expenses (Label K)" under "Depreciation tab" and this amount will automatically flow in Label 5K in Business tab > Depreciation Expenses. (See below image showing the location on where to input the tax depreciation details):
What You Need to Do:
Go to the Depreciation tab of the return.
Enter the tax depreciation amount in line item "Tax related depreciation expenses (Label K)" under the Depreciation tab.
This will ensure that the figures entered in the tax form reflect the tax depreciation (not just the accounting depreciation). Any difference in Tax Depreciation and Accounting Depreciation under the Depreciation tab will not be reflected anymore in the Reconciliation tab.
Important Note: Selecting "NO" with the question "It's a small business entity that has chosen to use the simplified depreciation rules?" will result to system capturing the amount under line item "Depreciation expenses on accounts" (which is the accounting depreciation, that is normally being imported via Financials) under the Depreciation tab.
Summary:
Ticking the question ""It's a small business entity that has chosen to use the simplified depreciation rules?" under Capital Allowances as Yes does not automatically display a depreciation expense line in Label 5K (under Business tab).
If simplified depreciation rules apply, enter the amount in the Depreciation tab via "Tax related depreciation expenses" which will flow in Label 5K.
Make sure the value entered represents tax depreciation, not only accounting depreciation. Meaning the "Tax related depreciation expenses (Label K)" should always contain an amount, regardless of whether YES or NO is selected under the simplified depreciation rules.