Question

Amend 2022 Depreciation Amount

Forum|Forum|2 years ago
February 13, 2024
2 replies
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A Tax Prep service did my 2022 taxes and calculated the depreciation incorrectly. My former accountant is saying an amended return is not needed and they can make the correction in our 2023 taxes.

However, I would like to switch to TurboTax for 2023 taxes. I know the correct depreciation amount for 2022. Can I make this correction for 2022 in TurboTax? I think I need to file a form 3115 with the 2023 return. If so, can I do this through TurboTax or should I use an accountant?

KrisD15

Yes, this can be done using TurboTax however you would need to use the DESKTOP version.

HERE are the steps to generate Form 3115 in TurboTax Desktop

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S

slcdawgAuthor

Thank you. I do have the desktop version but wondering how complicated form 3115 is and if I should attempt this myself?

J

JamesG1

IRS form 3115 Application for change in accounting method can be daunting. Follow the directions outlined by @KrisD15 above.

Per IRS form 3115 Instructions, page 1:

You must file under the automatic change procedures if you are eligible to request consent to make an accounting method change under the automatic change procedures for the requested year of change.

Revenue Procedure 2022-14 is found here.

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A

AmeliesUncle

How exactly was it calculated incorrectly? That could possibly dictate how it needs to be corrected.

Was 2022 the first year of the error? When was the property "placed in service"?

S

slcdawgAuthor

The property was placed in service in June 2018. The error was in the depreciation amount for 2022 only. The error was the preparer incorrectly entered the fair rental days on the market. This resulted in the depreciation amount being about 25% of what it should have been.

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slcdawgAuthor

Technically, it was an error on the 2019- 2022 returns, and therefore should be amended.

No, not a red flag since they will see the change was the depreciation.

When you sell, there may be "Depreciation Recapture" on the property which will be Ordinary Income, so it is best to get the depreciation straightened out now before there is any confusion about recapture in the future.

Amending won't affect your tax liability for 2019-2022, so why not?

Thank you. Part of the issue is my tax preparer is adamant they did not make a mistake. I don't want to pay someone else to do them and not sure how to get this preparer to do the amended returns.