Luxury Auto Check Box in Fixed Assets

Issue

What does the Luxury Auto option in Fixed Assets do?

Resolution

It sets a limit to the amount of depreciation that can be taken for an asset during the first year. It cannot exceed this hard coded amount. It may appear that the depreciation is not working on these assets, but it is. Reason being is that it may have already reached the maximum amount, maybe earlier in the year or by the use of plug numbers. Tax laws will affect this amount and this is addressed in service packs.

The hard coded amount comes from the tax laws. Microsoft releases updates(service packs) when the tax law changes.

Example - If the hard coded limit was $4000.00. No matter what the cost basis was or the Depreciation method, the YTD Depreciation cannot exceed this amount. Basically if the Yearly Depreciation amount was figured out to be higher than this set limit the system will only take the set limit. If it figures out a Yearly Depreciation amount lower than that hard coded limit, then it has no effect on the system.

Note - This is just an example. The amount may not actually be $4,000.00.

This article was TechKnowledge Document ID: 31384