DavidD66
Expert Alumni

Get your taxes done using TurboTax

The sooner you address the issue the better.  Since the entire cost of your house is allocated to the structure, and none to the land, you are taking too much depreciation expense each year.  You need to file Form 3115 Application for Change in Accounting Method in order to correct your depreciation for prior years.  Form 3115 is not a simple form to complete, so you might want to seek some help from a local tax professional.  

 

Before you start making any changes to your return that might affect prior years, I suggest you make a copy of your return by saving it with a different name.  

 

You should be able to adjust the "total cost when asset was acquired" in line 4 of the Asset Entry Worksheet and add the cost of the Land on line 8 of the Asset Entry Worksheet.  These amounts flow to lines 37 and 38 of Form 8829.  Note, line 4 of the Asset Entry Worksheet is the value of the entire property (structure and land).  Once you make changes to these amounts, they will change accumulated depreciation as well as current year depreciation.  That change in Accumulated Depreciation should be a decrease and the corresponding depreciation expense you took will need to be added back via Form 3115.   

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