Discussion:Correcting prior depreciation

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Discussion Forum Index --> Tax Questions --> Correcting prior depreciation


Kytaxpreparer (talk|edits) said:

20 February 2007
I have a new client (1120S) that had a computer that was being depreciated. I notice on their last years taxes, on the depreciation schedule, the computer was placed in service 2/2000 and it was set up for 5 yrs. Which would have ended with last years return; however, when I looked at the accumulated depreciation, it wasn't fully depreciated....there was approx $734 not depreciated? Anyone have any suggestions as to what to do??? I did mention to the client about having prior years returns, so I could maybe look and see where it went wrong, but they dont have them???

Bjeter (talk|edits) said:

20 February 2007
Make the adjustment on the current year return. There was a Rev. Proc. a few years back that allowed for automatic changes of accounting methods for incorrect depreciation. I don't even think you need to file a 3115, you just do it on the return. Check the instructions to the 3115 to get the automatic change procedures and a citation on the Rev. Proc.

JR1 (talk|edits) said:

February 20, 2007
Just book it and move on.

Deback (talk|edits) said:

February 20, 2007
Or consider it fully depreciated in the 5th year. If your client has changed tax preparers often, it's possible that one of them entered the wrong amount of prior depreciation at some time--or one or more of the tax preparers didn't provide the client with a copy of the depreciation schedule, as many tax preparers don't, for some odd reason. (I'm not directing this at you, Laura, because you're not the only one who doesn't do that.)

AHH (talk|edits) said:

20 February 2007
Could the difference in depr be as a result of a business use % decrease in one or more of the prior years?

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