I completed form 3115 to compute section 481 adjustment, but it doesn't seem to flow to 1120S. How do i enter a section 481 adjustment

[Rick19744 · Accepted solution]

Just include this as other income or other deduction on the 1120S with an appropriate description; line 5 or line 19 of the form.  

[kurtzr824]

Thanks.  That makes sense.  I'm surprised the program doesn't automatically transfer the adjustment amount from the 3115 to the 1120s

[Rick19744]

Welcome

[rmcallister2]

Will this solution apply to 1040 as well?

[MaryK4]

You can only add the 3115 if you are using the Desktop version- see Where can you upload a 3115 form to turbotax?

@rmcallister2

[laura111]

Hi,

If I am not a corporation and do not file a 1120, where do I make this adjustment as a self-employed filer?

Would it be added under ordinary business income/business deductions?  I have a section 481 adjustment of (7,000) and after completing all required parts of Form 3115 in TurboTax , it did not feed into the rest of the return.

[BillM223]

I would enter it under "Other Expenses" on your Schedule C (sole proprietorship business). This gives you a chance to explain what it is. 

If the original item was business income or expense, then net result will be the same no matter what line you put it on.