Hi,
I have a weird situation.
First to be clear, yes, I am asking the CPA that did this, but we are no longer clients, so the support is weak. Since their work doesn't seem right, my faith in them is diminished. I'm looking for insight from alternative sources.
Two issues
#1 I think my CPA used wrong schedule and #2 wrong basis on depreciation.
Multi-family rentals put into service 2014 and did not take depreciation annually.
We used a CPA for 2021 taxes and expressed we wanted to fix it. We provided our purchase data.
He submitted taxes with 15 year depreciation and no "other" correction line, no evidence of 3115. We have never done a cost segregation study. The CPA never discussed this either way.
In 2022, out of confusion and ignorance I just repeated his depreciation (did not use them again for other reasons). Now I am doing 2023 and studied up. My interpretation is that it should have been a 27.5 year depreciation. Also, can't figure out their basis as it wasn't the purchase data I provided.
Since they used 15 years and a high basis, compiled with me duplicating numbers a 2nd year, I may have overclaimed depreciation.
We plan to sell later this year, so looking to clear this all up.
#1 Do I amend those two years, or correct those two plus all prior collectively with form 3115 DCN 7 with attachments on math to fix everything all at once.
#2 Then since this would not be an expense, but rather something I owe from overclaiming, what line do I enter the overclaimed (positive income) amount on. This is a Section 481(a) increase in income (form 3115 part IV sec 26), but schedule E "other" is for expense (expense entered as positive), and the software will not accept a negative.
Thank you
