Form 3115

[oceanlovin'ea]

Don't you just love it when you get a new client and the prior preparer has made a major goof!!! New client came in (married one of my clients). He has a rental townhouse in another city that he has been renting since 2011. No depreciation ever taken!! Can't believe that one.

Want to make sure I do this correctly...... I figure what the depreciation should have been the other years and depreciation for this year. For this year it goes on Schedule E as depreciation expense. Then the depreciation that was not taken is put on another line and identified as Depreciation adjustment. I file Form 3115 to show that I have made the correction. Is this how I do it? Anything I am missing?

It sure is nice to have you all to bounce things off of. One person office is not always so great!

Thanks.

Linda, EA

[Terry]

Sec 481 (a)

That's what I would do, except I would put Section 481(a) adjustment (as a description) for the past depreciation on the Schedule E. Maybe that's what you meant.

[oceanlovin'ea]

IRS waiving Form 3115

IRS is waiving the requirement to complete and file form 3115 for small business taxpayers that choose to use this simplified procedure for 2014.

I don't know if this applies to a rental situation where the depreciation was not taken for 3 years. Can someone help me?

Linda, EA

[Maribeth]

I believe that the waiver of Form 3115 is only for those issues in the new repair regs that we were going to have to do a 3115 for.

Your adjustment for errors in prior depreciation still needs a 3115.

[ttbtaxes]

I agree that a 3115 must be filed. It's a category #7 change, correct?

[Terry]

Form 3115

Yes, #7, is correct.

I agree that a 3115 must be filed. It's a category #7 change, correct?

[oceanlovin'ea]

now what??

Ok. I still don't have the 3115 in my software. Taxpayer has a large refund coming. I hate holding up his refund. Can I go ahead and electronically file his tax return and then amend to add the 3115?

Linda EA

[ruthc]

When required to file...

You must attach the original Form 3115 to the TP's timely filed (including extensions) federal income tax return for the year of change. So my understanding is that you have to file by the due date of the return (4/15?). You also have to send a copy somewhere else. The instructions are pretty clear where to send. I think the address changed recently so make sure you have the current address.

[Gretel]

Don't think amended works, timely filed including extension. Have two myself, however one is for assets that would have been fully depreciated by now, so it does not matter which year I file form 3115 since no 2014 depreciation anyway. The other one has over 200 assets to evaluate and probably 30 of them needing adjustments.

[FEDUKE404]

About that goof

Don't you just love it when you get a new client and the prior preparer has made a major goof!!! New client came in (married one of my clients). He has a rental townhouse in another city that he has been renting since 2011. No depreciation ever taken!! Can't believe that one. . . .

There's a significant difference between a "major goof" and a total brain misfire.

Kinda makes you wonder what tax skills that "prior preparer" had? ? ?

In the meantime, I guess you can polish up your skills re the explanation of "allowed and allowable" depreciation.

Good luck!!

FE

[oceanlovin'ea]

in the program

Ok. It is in the program but just had to get to it a different way and attach it to the return. But I can do that.

Thanks for listening to my grumblings.

Linda, EA