Restaurant Leasehold Improvements

[BHoffman]

I know restaurants can depreciate leasehold improvements SL 15 years. Unfortunately, the prior preparer did not know this and chose 39 years. The amount is substantial. Any ideas on how to fix this for 2008? Amending 2007 is not an option for various messy reasons.

[TAX]

I know restaurants can depreciate leasehold improvements SL 15 years. Unfortunately, the prior preparer did not know this and chose 39 years. The amount is substantial. Any ideas on how to fix this for 2008? Amending 2007 is not an option for various messy reasons.

Look into completing 3115 or Just take the diffrence in 2008 (Not sure though if you can do it)

[veritas]

The instructions say

you may amend the 2007 return so I suppose you could file form 3115.

[BHoffman]

Nuts. Don't want to amend 2007 as this would involve a very hostile ex-partner. That form 3115 is a brute.

What if just change the life to 15 in 2008 and let the past lay there. Should basis be adjusted to reflect the "allowed or allowable"? I'm not sure if an election needs to be made to take the 15 years either, but it doesn't look like it.

[veritas]

Your reponsibility is

to advise your client that an amended return should be filed. If you change 2008 to the correct life then I believe you are required to prepare the amended 2007 return.

It is up to your client what happens with the amended return.

[BHoffman]

Okay. Will do. Thanks!

[JG EA]

Are you sure it was wrong. It is not a blanket 15 years for restaurants. There were and are qualifications. Make sure it qualifies. For instance:
It does not apply to enlargement of the building. There are other rules. See TTB 9-17.

[BHoffman]

Thanks JG. These were qualified improvements.