You should claim catch-up depreciation on this year’s return. Catch-up depreciation is an adjustment to correct improper depreciation. This occurs when:
- You didn’t claim depreciation in prior years on a depreciable asset.
- You claimed more or less than the allowable depreciation on a depreciable asset.
Claiming catch-up depreciation is a change in the accounting method. You’re changing from a depreciation method that’s not allowed to one that’s allowed.
Instead of filing amended returns, you must correct this on this year’s return. Follow the steps outlined in the instructions to Form 3115: Application for Change in Accounting Method.
IRS - About Form 3115
