Depreciation and Form 3115

[David]

New client has a 3 year gap where no depreciation was taken on their rental property. In the past I have filed Form 3115 to get automatic approval to change from an impermissable to a permissable method of accounting and take all depreciation that should have been taken. However, I have always done this when the TP sold their rental property.

My question is whether I can take all of the depreciation adjustment in the current year as a 481(a) adjustment when the TP is still renting the property.

I think it is OK but want to make sure.

Thanks.

[Catherine]

I have a day care lady whose former preparer did not take any depreciation on her house/place of business.  My plan is to put it all on 3115 this year as a section 481(a) adjustment.  She is still in business.  

 

Don't know if that helps answer your question - but you'll at least know you have company!

[Lion EA]

Yes, do it now.  (Don't the regs say something along the lines of When the error/omission is discovered?)  In fact, if you discover any other changes, now is the one year you can do almost anything on one 3115 without a user's fee due to the "simplification" of the new repair vs. capitalization regs.

[David]

Ok, thanks.

[joanmcq]

Yes, I do it whenever I find an error. Sometimes it's when it's sold, like one in my extension pile, and some when I get a new client.