3115 and filing status change

[Possi]

I have a new client who needs a 3115 filed for depreciation not taken from 2010-2014; then, the incorrect amount was taken in 2015.

She now tells me that from 2010-2014, she was married and it was a contentious divorce.

The IRS has sent her a love letter demanding about $20k. I haven't seen the letter, and I haven't seen the tax returns. I am anticipating a huge windfall in tax prep fees if I can figure out this mess, so I'm still wanting to grab this new client. Plus, the financial advisor who sent her sends me a lot of great business. I don't want to let him down.

I have only done 3 or 4 3115's and never like this where the filing status has changed. I wonder why she got the letter and her ex didn't. Or even IF her ex didn't. I just don't know.

My question is, can I just jump in there and do the 3115 in her name only? Grab the depreciation and get on with my bad self?

 

[Terry D EA]

I'm a bit confused which is nothing new. To change the filing status you would have to amend the return. Not sure how they were filed but if they were MFJ you can't amend to MFS. The 3115 would definitely be used to correct the depreciation but would affect the original MFJ return if the return was filed using the MFJ status. I looked at the form 3115 to try to find some place where the filing status would change and I am pretty sure that form is not used to change filing status. I'm going out on a limb here so it sounds like your client wants to amend or change the filing status of the originally filed returns to correct the depreciation or take the depreciation that wasn't claimed in an attempt to leave out the ex-spouse to try to offset the 20K owed. I definitely would want to see that letter before I suggested anything. Again, I don't know what filing status was used on the original returns. Assuming it was MFJ then no amendment to MFS is allowed. The only possibility of this type of change is amending the return prior to the filing deadline which in your case is long past.

.>>>>>>My question is, can I just jump in there and do the 3115 in her name only? Grab the depreciation and get on with my bad self?<<<<<< I am going with no here but it still depends what filing status was used on the original return. 

[rfassett]

I agree with Terry D.  There are just too many unknowns here to make an informed decision - or even a WAG for that matter.  I would put this whole thing aside until you have had a chance to review all of the parts.  The path to go then will probably become abundantly clear.

[Lion EA]

Definitely a good one for an extension.  You'll probably need the divorce decree, also.  Did the rental go to her as part of the property settlement in the divorce?  If so, the adjusted cost basis on that date came with it.  So, she could file Form 3115.  And, include 2015.  (She's not trying to amend prior MFJ returns.)  But, you need to start with the IRS letter, and her prior tax returns.  Extension.

[Possi]

Thanks for all the responses. It's funny, I get emails alerting me to every new post on this site, but never get notification of responses to my own questions. I got slammed and haven't been back to check on this.

The filing status was MFJ until the divorce in 2015. I'll put this off or pass on it all together. It is looking like she will be a very needy client. I never get paid enough for anyone who sucks a ton of time from me. I enjoy what I do too much to have a new client take a chunk out of my fun factor!