topic Re: Fixing a intangible amortization error in Business & farm

Fixing a intangible amortization error

LOM006 — Tue, 24 Feb 2026 05:54:58 GMT

We discovered that we have made an error when setting up the Amortization for a Renewal Franchise Fee. The Amortization term was set at 15 years on a $12,500 payment in 2019. It should have been done on a 5 year term which is the renewal term in the contract. We are a little unsure how to correct this and do we have to file a 3115. Are we just able to adjust the amortization this year and take difference on this years tax return? The result of this is the same as amending 3 prior years as no tax was paid and the loss would be carried forward to this year.

Re: Fixing a intangible amortization error

Mike9241 — Thu, 06 Apr 2023 16:14:13 GMT

a 3115 is required because it's past the two-year mark to amend returns. what you do is compute the correct amortization through 2021 and from that subtract what you took. the difference becomes a section 481 adjustment on the schedule where the intangible is reported. then in 2022 you take the correct amount.

Re: Fixing a intangible amortization error

LOM006 — Thu, 06 Apr 2023 16:16:31 GMT

thanks mike