QIP - change method for 18 and deduct on amended 19?

S Corp placed $250K of QIP in service in 2018 and another $50K in service in 2019. The 2019 1120S was filed back in March so all of the QIP was set up as 39 year, no bonus. There was no extension filed for the 2019 1120S.

Rev. Proc. 2020-25 seems to provide only two options for changing the QIP depreciation:

1) Amend 2018 and 2019 tax returns or

2) File 3115 and deduct cumulative adjustment for 2018 and 2019 QIP depreciation on the 2020 tax return

But might a 3rd option be available that would allow taxpayer to file a 3115, amend the 2019 return and deduct the cumulative QIP depreciation adjustment (for 18 and 19) on the 2019 amended return?

Yes, that is a straightforward applicaiton of the section 301.9100-2 automatic six-month relief provisions. But the Form 3115 would cover only the 2018 improvements. The amended 2019 return would have to take into account both the Form 3115 and the change to the 2019 improvements.

Thank you for confirming this.

A couple of follow-up questions if you don't mind:

I was planning to e-file the amended 2019 Form 1120S with Form 3115 attached as a pdf reporting the negative 481 adjustment for 2018. Okay to e-file? We will also mail the original paper copy of 3115 to Ogden.

Only one DCN to report in Part 1. # 244. Correct?

TY

The Form 3115 is for 2019. Did you put 2018 on the form? Is that’s what’s tripping the diagnostic?

Yes, that was tripping me up. I figured it out and edited my post but you were too quick. Thanks!

The original goes with the return. A copy goes to Ogden. Normally I suggest keeping the original for the file, since the return version is a PDF. Only one DCN, 244.

Re: signature...wouldn’t an e-filed return and 3115 not require to be a PDF attachment (wouldn’t the e-file authorization suffice)?

It would, but I always suggest preparing Forms 3115 outside of the software due to formatting issues, lack of updates for recent changes, and character limits (and formatting restrictions) for attached statements.