Form 3115 - Change in Accounting Method

[n1njah]

Hi, I'd like to know how to properly file Form 3115.

The IRS says to attach the original 3115 to the tax return for the year of change, and send a signed copy no earlier than the first day of the year of change.

So if I'm changing it for the 2022 tax year it would be too late since a signed copy was not sent on the first day of the year of change, correct?

If I want to change it for the 2023 tax year, then I can send it by the first day of 2023 and file the original copy with my 2022 return next year?

A little confused.

Thanks.

[Mike9241 · Accepted solution]

You are not reading the instructions correctly if this is 

Automatic change request. Except if instructed differently,
you must file Form 3115 under the automatic change procedures
in duplicate as follows.
• Attach the original Form 3115 to the filer's timely filed
(including extensions) federal income tax return for the year of
change. The original Form 3115 attachment does not need to be
signed. if the year of change is 2022 it would be due with the return filed timely in 2023.  
• File a copy of the signed Form 3115 to the address provided
in the address chart on this page, no earlier than the first day of
the year of change - again assuming the year of change is 2022 then no sooner than 1/1/2022 - and no later than the date the original is filed - this would be the same date the original 2022 return is filed in 2023 - with the federal income tax return for the year of change. 

[n1njah]

Thank you very much

[mdeodhar]

Hi @n1njah 

I am in the same boat. I am applying to change the accounting method to MTM effective 1/1/2022.  Can you please share how you filled the form 3115? I think there is no confidential info on this form specific to your taxes. I am confused about some of the options to be selected on this form.

@Mike9241 can you please guide on where I can find form 481(a)? I have downloaded TT home and business but in the forms mode I cannot find form 481 when I search for it. Can you give an example on how to fill out the for 481(a) ?

Thanks 

Mandar      

[CarissaM]

It would be best to click here to give us a call, so we can guide you through the process. @mdeodhar 

[mdeodhar]

@CarissaM 

Thanks for the tip but I have made numerous calls to TT. The issue is there is no way to request a specific person or someone with specific skillset/experience. Lot of TT experts do not know in detail about MTM and filling out form 3115.

[GeorgeM777]

In a previous post you inquired about section 481(a), so this response will address 481(a) and you can follow-up with additional questions if necessary.  Internal Revenue Code section 481(a) is referenced in Part IV of Form 3115.   While you may have already done this, in TurboTax to access Form 3115 you need to go into Forms mode and then select Open Form (upper left of screen) enter Form 3115 in the search bar and then click Open Form.   

Essentially, a section 481(a) adjustment attempts to reconcile a previous tax year's reporting (effected under one method of accounting) with the current year's tax reporting (effected under the new method of accounting, i.e. MtM).  To better understand your tax situation, did you have any open security positions at the end of 2021?  If yes, did you carryover these open positions into 2022?  It would help us to know what, if any, open positions you had at the end of 2021 that rolled over into 2022 for which you need to mark-to-market.  

@mdeodhar 

[mdeodhar]

@GeorgeM777 

Thanks for your help. After calling TT almost 10 times to get help finally gave up. Going to a different tax firm to get my taxes done.  

Thanks