In asset with a five year recovery period is subject to the following limits on depreciation: the first year the asset cannot be depreciated more than $2,560.00, the second year limit is $4,100.00. The limit for the third year is $2,450.00, and the annual limit for years four and five is $1,475.00.

The screen below shows how these limits are entered.

These limits are specified for the asset on the second screen of the **Fixed Asset** form as shown below.

Refer to Chapter 9, *Calculate Depreciation *in this manual for a discussion on how depreciation is calculated and limits are applied.