Seaside CPA wrote:I'm going to follow-up on this post with a question. New client put a rental into service the end of 2021. House was set up for depreciation over 27.5 years, but should have been 39 year property (average of less than 7 days), and is still less than 7 days average for 2022. Does either a 3115 have to be filed here or an amended 2021 tax return? No way to just correct on 2022 return, correct? The difference in depreciation is only around $550 for 2021.
No way to just correct on 2022 return, correct?
(b) Taxpayer has not adopted a method of accounting for the item of property. If a taxpayer does not satisfy section 6.01(1)(a)(i) of this revenue procedure for an item of depreciable or amortizable property because this item of property is placed in service by the taxpayer in the taxable year immediately preceding the year of change (“1-year depreciable property”), the taxpayer may change from the impermissible method of determining depreciation to the permissible method of determining depreciation for the 1-year depreciable property by filing a Form 3115 for this change, provided the § 481(a) adjustment reported on the Form 3115 includes the amount of any adjustment that is attributable to all property (including the 1-year depreciable property) subject to the Form 3115. Alternatively, the taxpayer may change from the impermissible method of determining depreciation to the permissible method of determining depreciation for a 1-year depreciable property by filing an amended federal income tax return, or an administrative adjustment request under § 6227 (AAR), as applicable, for the property’s placed-in-service year prior to the date the taxpayer files its federal income tax return for the taxable year succeeding the placed-in-service year.
No easy way to fix for such a small amount.
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