Reviewed asset summary from last year and asset class was incorrect. Change the Class type in turbotax, now shows " Asset class incorrect" message when trying to file.

[tagteam]

Can you provide more details?

You might need to amend your last return if there was an error. At the very least, you will probably need to delete the asset and re-add it if the asset had been transferred in from last year's tax file.

[Carl]

If changing an asset's classification will cause a change in it's depreciation period, then it's not a simple matter of changing the class. Basically, you can't do that. Now can you provide more details on what the asset is?

 - How did you originally classify the asset?
 - In what tax year was the asset placed in service?

You "may" have to file form 3115 - Change In Accounting Method in order to fix this, if your initial classificaiton was "in fact" wrong. But the 3115 isn't simple. So give us the details and history of the asset so that hpefully we can help, and avoid the 3115 route.

The 3115 is *NOT* simple and requires professional help. So if you can avoid that path, that's what you want to do.

[hillbros]

I have a similar problem.  The asset is a building purchased and in service end of 2018 on a farm which we considered single use but after talking with tax help said it does not qualify for single use.  It was classified as Other and we took the bonus SDA of over $40K.  We made improvements in 2019.  I was told to amend last years return and classify both as Non-residential real estate.  Is this the correct path?  We're a little concerned about whether or not form 3115 is necessary or if we can just leave it.  TT did not show any errors after the review and low risk of audit.  Thanks in advance for your help.

[tagteam]

---

@hillbros wrote:

 We're a little concerned about whether or not form 3115 is necessary or if we can just leave it.  

---

One thing is for certain and that is you do not need to file Form 3115 unless you filed using an impermissible accounting method for two consecutive tax years.

Otherwise, you can amend your 2018 return provided you have not filed your 2019 return.

[hillbros]

Thanks for your reply and time.  Did an amendment and will have to pay additional taxes but I guess it's best to fix it now in hopes we don't get audited.  Does sending in an amendment give auditors more reason to question other information?

[tagteam · Accepted solution]

---

@hillbros wrote:

Does sending in an amendment give auditors more reason to question other information?

---

I do not believe it does, but they can reassess anything as long as the return is open (typically three years - which runs from the date the return is due or the date it is filed, whichever is later).