You will need to complete and file a Form 3115 with the IRS if you wish to correct the basis of this property, since it has been in use since 2005 and you cannot correct the issue by amending your returns.
The impact of not correcting this mistake can be substantial. If you do NOT file a Form 3115, you will pay gain on approximately $66,000 of the sale price of the property. If you DO file a Form 3115, you will pay tax on approximately $23,400 of the sale price of the property.
Form 3115 can be found in TurboTax Deluxe, Premier ,and Home & Business download products.
