Question

can I change the cost number for depreciation without file form 3115?

Forum|Forum|6 years ago
March 28, 2020
1 reply
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I have two rental properties but both may need to change the Cost for depreciation. Please let me know if I need to change and if I could avoid the form 3115.

1. I rented a condo from 2010, I did not enter the cost of land. But I found there is a Land value on the property tax bill. Can I continue to depreciate it without the enter of land value or I have to change it?

2. I rented 45% of my house since 2012, but on depreciation page, I entered total value of the whole house and 100% of business usage.

If I need to change above numbers, can I recalculate these number for past years and enter the correct number for 2019 tax return? Since I do not think these change are "Change in Accounting Method", these are only change of accounting numbers.

T

ThomasM125

You need to adjust the basis of the condo by subtracting the land value from the cost and then continue to depreciate it using the lesser cost basis. You would need to amend prior year returns to correct the depreciation deductions that where wrong. You would also have to adjust the cost of the home to reflect the 45% of usage.

It sound like you overstated your depreciation for previous years, so you would not need to file form 3115 to change your accounting method. That would only apply if you hadn't taken depreciation in previous years and wanted to enter a deduction in the current year to make up for the lost depreciation.

You can only correct the excess depreciation taken in previous years by amending the tax returns for those years.

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