Wrong basis

[oceanlovin'ea]

I have a new client this year. Former preparer has been very ill and they couldn't even get her on the phone.
They bought a house last year for rental property. The basis that was used was the entire amount of the cost of the home, including the land value.

How can I correct this mistake? Do I have to amend last years return and correct the depreciation schedule and then carry forward?

Thanks for the help

Linda

[BOB W]

I have a new client this year. Former preparer has been very ill and they couldn't even get her on the phone.
They bought a house last year for rental property. The basis that was used was the entire amount of the cost of the home, including the land value.

How can I correct this mistake? Do I have to amend last years return and correct the depreciation schedule and then carry forward?

Thanks for the help

Linda

Are you sure that it was a house not a Condo? ( trying to give the benefit of doubt).

[ChEAr$]

Are you sure that it was a house not a Condo? ( trying to give the benefit of doubt).

Since LInda is about 50 plus miles inland from the Gulf, it's likely not a condo.

But yes, I would recalculate actual basis to use for 2009 onwards, then suggest to
client the 2008 return be amended.

[oceanlovin'ea]

Tampa

Yes, I am afraid it is an actual house in Tampa.

Now I would love a condo on the beach. We just booked a condo for a week the end of June at Indian Shores near Clearwater. Can't wait. Has 2 balconies overlooking the beach.

Thanks for your help with the crazy return. I've got to get these things done!!!

Linda

[taxea]

It is only one year. You should amend the 08 to get the correct figure from the start. You don't have to get it in before the 09 but at least 08 will have the correct figures. And be sure to make any adjustments on the 09 return for the extra amount of depreciation taken in 08.

They may owe for 08.