Change In Prior Year Balance Sheet

[geekgirldany]

I have an client where an asset cost was reported incorrectly, S-Corp. This affected the retained earnings as it was a Section 179 expense. So I've adjusted the balance sheet on the tax return for the prior year.
Should I include a statement saying why there was a change? It was around $2,000 difference.

[Roland Slugg]

Correcting the prior year's balance sheet only makes matters worse. What the client needs to do is file an amended return for the YIQ, using thereon the correct cost of the asset as well as the correct amount of §179 deduction ... higher or lower by the $2,000.

[geekgirldany]

Yes, I've amended the tax return with the incorrect cost. I thought I put that in the original post but did not.