I placed in service rental real property on Oct 1st 2017. In my 2018 tax return I depreciated the basis, land included. Can I amend this mistake on Form 1040X in 2019?

[2elena_tax-filin]

Rental real property is located in a foreign country, so depreciation is done with ADS Straight Line method.

Property was bought in 2017.

[HelenaC · Accepted solution]

No, you can't use form 2018 1040X to amend for corrected depreciation from a 2017 income tax return. You should amend your 2017 and 2018 income tax returns (if already filed) since that is when your foreign rental was placed in service. 

• See How do I amend a 2017 return in TurboTax?
  

Foreign rentals are depreciated over 40 years. To get to that section of TurboTax: 

1. On the Review Your XXX Rental Summary screen, go to Property Profile and update.
2. Go through the interview until you get to the Is Your Property in Any of These Designated Areas? screen.
3. Continue with the onscreen interview. 
4. On the Depreciation Results screen, it will show the property is being depreciated for 40 years.

See the screenshots below.

[2elena_tax-filin]

Thank you. Should I also file Form 3115 since land is not depreciable, and thus my mistake is an "impermissible method of accounting"?

[HelenaC]

You're not requesting so much of a change in accounting method as you are correcting an error. Since the error is only from 2017, I wouldn't since you are amending your tax return(s). If the entry had been made years ago, 1040X would not be an option and you would file form 3115.

[2elena_tax-filin]

Thank you!! That's a great relief.

[HelenaC]

You're welcome. Thank you for using TurboTax!

[Carl]

The 3115 is basically not necessary. Remember, you have 3 years after the originally filing to amend the return. So there's no reason or need to change any accounting method. You only need to amend and correct the 2017/2018 tax returns.
You should amend each return in numerical order, starting with the 2017 tax return. Note that when you amend the 2018 return you can not import from the 2017 return because the prior year's depreciation taken that gets imported will just flat out not be correct. That would result in the wrong amount of depreciation on the 2018 return yet again.
Now, if you have not yet filed the 2018 return, then you have absolutely nothing to amend for 2018.

[2elena_tax-filin]

I suspected I had to recalculate the depreciation for both returns, because with the S/L method the depreciation rate changes every year. Thank you very much for pointing this out. It's very appreciated.