Client filed a Schedule C and showed depreciation for assets in 2015 but missed it in 2016 and 2017. Client in 2018 files a 1065. My understanding is that the missed depreciation would have to be caught up in the 2018 return by filing a 3115. Is there any other alternative?
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What was the filing status for 2016 and 17? Sch C or partnership?
If Sch C, then you can't take depreciation on 1065 for a period prior to when it owned the asset. You could amend 1040's for 16 and 17, but the net effect would probably be zero. For example, say at the end of 2015 the book value of asset was 10K and this was the amount that the partnership purchased the asset for. Amending 1040's to take depreciation would lower the book value, resulting in a gain in the year it was sold to partnership. I know some purist is going to bring up allowed or allowable, but if the net effect over 2 years is going to be zero anyway, I would just leave it as filed.Last edited by kathyc2; 09-04-2019, 10:45 AM. -
2016 and 2017 was Schedule C. 2018 is the first year it was a partnershipComment
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