Help- need to correct amortization for C Corp

[David]

New C Corp client's previous tax preparer has not been deducting goodwill amortization properly or consistently. Goodwill was recorded in January 1996. The years that amortization was taken appears to be on track to amortize over 30 years. Some years no amortization was deducted.

I realize I need to file Form 3115. My main question is regarding the statements that are required. Is there anything in the ATX program that I can use to attach the required statements to Form 3115? I can't seem to find a statement form that addresses the requirements listed on the form instructions.

The only thing I see is a blank statement tab in the elections form. Is this what that statement form is for?

Also, where do I input the adjustment for goodwill amortization from 1996 - 2006? How is this handled in the asset entry- or is it not handled there?

I am e-filing the tax return. Do I still have to mail the Form 3115 to the IRS as per the instructions? The C Corp qualifies for the automatic change request.

Thanks for your help.

P.S.

On another matter- I have been locked out of the ATX site. My password has been reset to my installation code. I am not at my office this weekend and am working at my home office. The instatllation codes are at my office.

Does anyone know how I can get my installation code without having to sign into the ATX site with a password?

Thanks

[kcjenkins]

Yes, the blank statement is used for this sort of situation, or any other time you need to include an explanation of some entry or some disclosure.

Part III is where you will show the adjustment, and there are worksheets for it, as well. I hate that form, but I've found that the instructions are fairly good if you read them through several times. ;~)

I don't see any way to get the install codes without either your invoice or calling the help number. And you may have to do that anyway, because I know that MY install code, which I used to install it just fine, was not the same number that I needed to unlock the site and reset my password. Two different numbers. of the 20, were changed, and no one could tell me why, but once I got the change given to me, I was able to get in. I've heard a couple of other people say that their number was also slightly different from the one on their invoice. So if you get the invoice, and try to reset the password, and it does not work, call the help line and right off the bat ask them to verify your install code. That could save you the 15 minutes I wasted before I realized what the problem was.

[David]

KC,

Thanks for your help on this. I had to call ATX but at least I'm back in.

For Form 3115- My understanding is that for a change in amortization, I need to complete Schedule E under Part III. Is this the section you are referring to? There is another Part III titled "Information For Advance Consent Request". I don't believe this is the section that needs to be completed.

In either case, I still don't see a line where I would input the dollar adjustment for the correct amortization from 1996 - 2006. I also don't see the worksheets you refer to. Where exactly are these?

Sorry to be a pain and appear dumb about this.

Do I only show the 2007 amortization in the current amortization line of the Asset Entry form, or do I also show the correction amount from 1996 - 2006?

This is one of my main questions- where do I show the huge amortization dollar amount to correct amortization from 1996- 2006?

Thanks.

[jainen]

>>the huge amortization dollar amount to correct amortization<<

I'm always cautious of questions about goodwill. A huge dollar amount is likely to attract IRS attention so you should research the matter thoroughly. Before anything, verify that the asset was correctly defined and eligible for amortization. You say goodwill "was recorded" in 1996--does that mean the corporation merged with another business at that time? Are you sure 30 years wasn't used to comply with anti-churning or other older rules? The corporation previously made unauthorized changes in the amortization schedule by switching it on and off, so doesn't Revenue Procedure 2006-12 require amended returns before they are eligible for the automatic consent procedure? This is more than just a math problem.

[kcjenkins]

For Form 3115- My understanding is that for a change in amortization, I need to complete Schedule E under Part III. Is this the section you are referring to? There is another Part III titled "Information For Advance Consent Request". I don't believe this is the section that needs to be completed.

In either case, I still don't see a line where I would input the dollar adjustment for the correct amortization from 1996 - 2006. I also don't see the worksheets you refer to. Where exactly are these?

Do I only show the 2007 amortization in the current amortization line of the Asset Entry form, or do I also show the correction amount from 1996 - 2006?

This is one of my main questions- where do I show the huge amortization dollar amount to correct amortization from 1996- 2006?

The section titled "Information For Advance Consent Request" does not need to be used. The worksheets for Part III are found on the tabs at the bottom of the form.

The current amortization goes in the asset entry form, the correction amount will be shown as a separate line item on the return, in Other Expenses, not with the current amounts. It should be labeled 'Correction from Form 3115 attached".