Amendment of rental property depreciation

[moussaj]

I believe that incorrect values were inputted when calculating my rental property's straight line depreciation in 2014.  Is it possible to amend the calculations on my 2014 - 2017 tax returns?

[TaxGuyBill · Accepted solution]

Yes, if you entered the wrong Basis for your rental property, you can amend your 2014, 2015, and 2016 tax returns (you don't file the 2017 tax return until early 2018).

https://ttlc.intuit.com/questions/1894381-how-to-amend-change-or-correct-a-return-you-already-filed

When you do your 2017 tax return, be sure that the correct "prior depreciation" is entered.

[moussaj]

Thanks TaxGuyBill.  Do you also recommend I file Form 3115?  Or will amending the prior tax returns be sufficient?  

Of note, I started the incorrect depreciation basis value on my 2013 tax return, and that value has carried over on my 2014, '15, and '16 returns.

[TaxGuyBill]

No, Form 3115 does not apply if you only used the wrong amount for your Basis, but did everything else correctly.

[arulli1948]

TaxGuyBill, I just amended my 2014-2016 returns to correct the cost basis when acquired for my rental properties. In doing so, this changed the depreciation amount for each year. Do I correct the depreciation amount in my 2017 tax return? If so, do I use the Line 10 Depreciation Deduction, or Line 12 AMT Depreciation Deduction from the TurboTax Asset Entry Worksheet?

[TaxGuyBill]

The "prior depreciation" is the amount you SHOULD have taken.  Assuming it has always been 100% rental since it was  first "placed it in service", you can just leave that BLANK, and the program will calculate the proper prior depreciation (assuming you enter the correct Basis in the current year program).

[DB_sunnybeach]

If an amendment needs to be filed because of incorrect mortgage interest deducted on a Sch E for years 2014-2016 and depreciation was never taken in those years as well, does a 3115 need to filed to take the missed depreciation or can it de taken on the amended returns?

[TaxGuyBill · Accepted solution]

@DB_sunnybeach   Because you did not claim depreciation for 2 years in a row, that adopted an "accounting method".  That means only Form 3115 should be used to 'catch up' on the depreciation.
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