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.