Using a wrong Basis for depreciation can only be corrected by amended returns, and you can only amend up to the 3 prior years.
When entering the asset in TurboTax and it asks for "prior depreciation", you need to enter the amount that you could have taken (if you leave it blank, I think it automatically calculates that).
Depreciation errors are corrected by either filing an amended return or filing a change in accounting method form. Depreciation errors that are NOT subject to the accounting method change filing requirements require amended returns and include:
Amended Returns:
- You claimed the incorrect amount because of a mathematical error made in any year.
- You claimed the incorrect amount because of a posting error made in any year.
- You claimed the incorrect amount on property placed in service by you in tax years ending before the statute of limitations has expired.
- You are changing the amount of Section 179 claimed or not claimed.
- Election to apply the $2,500/$5,000 de minimis safe harbor rules (within its own time period requirements of return due date plus extension).
- Election not to claim bonus depreciation under 168k (within its own time period requirements of return due date plus extension).
Amending returns will only correct depreciation errors that have occurred in the last three years.
Wrong basis
