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Level 3

depreciation basis error/adjustment

I have a rental property that I purchased in 2004.  I discovered this year that my basis was entered incorrectly back when I purchased the property. It was 70,000 less than the actual value.  Can I just adjust the basis and continue the with the same 27.5 year depreciation schedule?

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Employee Tax Expert

depreciation basis error/adjustment

Yes, you can change the basis on your 2018 return.You can also go back and correct the basis on your open tax returns (2015, 2016, 2017) by amending your tax returns for those years, using the same 27.5-year schedule.  But you can't go all the way back to 2004. Using a wrong Basis for depreciation can only be corrected by amending your tax returns, and you can only amend up to the 3 prior years. Also, the due date for amending 2015 is 04/15/2019, unless you filed your 2015 later with an extension.