Knowledge Base

14188: 4562 - Description Keywords

Fed Returns Generally

Are there any specifications on what should be entered in the description field for a depreciable asset? 

An entry in the description field is not mandatory; however, it should be entered for tracking purposes. Certain items have set or recognized description codes within Drake Software. These terms determine how the software recognizes the asset and where it carries the information entered on the 4562 detail entry screen to other places in the return. 

In an individual return:

  • For amortization of points that carry to Schedule A, line 8c, the description must begin with the word POINTS.
  • For computer software that carries to line 16, /CS must follow any other descriptive terms. For example, enter Computer Software/CS as the description. 
  • If an asset is the main home for Form 8829, enter /8829 anywhere in the description field. 

In a corporate, S corp, estate, or partnership return: 

  • For land, enter LAND as the first word of the description on the 4562 screen. On the FED~DEPR worksheet for assets described as LAND, the depreciation basis is zero, because the cost of the land carries instead to line 12 (1120/1120-S) or 11 (1065) of the Schedule L instead of line 10 or 9, respectively.  
    • Note: If there is land cost associated with another asset, such as a building, the land cost should be entered on the 4562 for that building by using the Land Cost field.
  • LAND IMP entered in the first part of the description is recognized as land improvements. 
  • For computer software that carries to line 16, /CS must follow any other descriptive terms. For example, enter Computer Software/CS as the description. 

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