1065 and 3115

[TAXMAN]

Help Please.

I need a problem solved. PTRshp closed down 2015. Sold all assets.Did put $ in checking account.

In calculating gain and loss I discovered that $11k worth of depreciation was not taken either due to oversight or changing in software. I have gone through all the depreciation schedules for the life of the partnership and it appears that only 2 assets represent 99% of this number. Ptrship totally shut down in 2015.

Can I pu this lost dep as a negative adjustment as other deductions then show on 4797 the correct dep take including the lost dep or not take as an adjustment and let the 4797 show it as a loss? I am at a loss as to correct procedure or what would you do?

All gain will be ordinary as just about everything was fully dep.

Thanks for your help.

[TAXMAN]

Just bumping up.

[jklcpa]

You will use form 3115 to correct the cumulative effect of the prior years' errors.  Form 3115 will correct the total prior years' depreciation through 12/31/14, and you will report that cumulative adjustment as a deduction on the 2015 return. That will bring your accumulated depreciation and net book value at the end of 2014 to the correct amounts.

Correct the amounts for beginning accumulated depreciation at 1/1/15 to what they should have been, and then allow the proper depreciation expense for these assets to be calculated on the form 4562 for the 2015 year.

Report the sale on 4797 with the proper final accumulated depreciation and basis figures as if it had all been done properly all along.

[Terry D EA]

I have nothing to add. Judy has given you the best guidance with your situation. Form 3115 and follow her steps.

[TAXMAN]

I love this site. Thanks for the confirmation as this was the only way I saw to fix esp. since I saw all the dep #'S