Thank you @AmeliesUncle !
Now, I am confused as to how much I need to include in the 'Other expense' of Section 481(a) Adjustment.
Let's say my Cost Seg breakdown is as follow:
5 yr asset -> $20K
15 yr asset -> $6K
27.5 yr asset -> $150K after excluding land cost.
I will enter the following as depreciation for the tax return:
1. Depreciations:
5 yr -> cost basis $20K. Current depreciation without bonus depreciation calculated by TTX, lets say $10K
15 yr -> cost basis $6K. Current depreciation without bonus depreciation calculated by TTX, lets say $500
27.5 yr -> cost basis without land cost $150K. Current depreciation without bonus depreciation calculated by TTX, let's say $5K.
Let's say Form 3115 has the section 481a adjustment as $35K. How do I calculate how much I need to fill out in the 'Other expense under 481a adjustment'?
1. As it meaning the whole $35K or
2. Should I minus the 5 yr and 15 yr assets depreciation which were already calculated by TTX from the total $35K? Meaning $35K - $10K - $500 = $24500? Or
3. Something else?
