personal property added to business

[NECPA in NEBRASKA]

My customer has personal property that she has been using in her home business since 2007,, but didn't mention it to me until this year. It was purchased before 2002 and she doesn't have the records as to how much she paid for it. She has looked up the current FMV for the used property, but I still think that it may be high. Her customer, and ex IRS person, told her that she could put it on the books for 2012 and fully depreciate it. I think that it should be put on the books as if it was added in 2007 when she began her business and I would have to amend the open years, which won't do much good, because it's $600-$700 over 7 years and my fee would be more than that to amend. Everything that I can find is the depreciation date is when it was put into service, and to use the depreciation that should have been taken .

Am I being too tough in saying that four 1/2 years are already depreciated or is the IRS "person" wrong? She may have been a receptionist for all I know.

Thanks for any help!

[Lynn EA USTCP in Louisiana]

There is a procedure to do what the ex IT'S agent advised. See form 3115, which has an automatic option for taking the depreciation.

[michaelmars]

No matter what you do, your fee should be higher than the saving of tax on a 700 deduction

[Lion EA]

And you still need the lower of her adjusted cost basis on the placed-in-service date or the FMV on that date, so she has some research to do also.

[NECPA in NEBRASKA]

Thanks everyone. I told her that she needed the cost and she had no idea, she just keeps giving me prices that she finds on Amazon for used stuff.