A taxpayer disposes of property in 2008 and becomes aware that he never depreciated the property which was used in his business. He can file 3115 for change in accounting. Does this allow him to go back and amend open years to take the allowable depreciation or (I thought I had heard that he could take it in year of disposition and not lose it.)
What is the proper procedure?
In small business quickfinder J-6, it almost sounds like you can take unclaimed depreciation from unopen years in the year of disposition?
Doesn't sound logical but don't want to miss a deduction.
That's not the way IRS sees it. The definition of accounting method includes anything that sets the amount or timing of a deduction.
Treating an asset as non-depreciable for two consecutive tax years is considered to be establishing an accounting method. Right or wrong, it can't be changed without IRS permission.
In the small business quickfinder J-6, it almost sounds like you can file 3115 and take depreciation in year of disposition even past open years. Have you heard of anything like that?
follow the automatic consent procedures -
6/22/09
at 8:16 PM
>>take depreciation in year of disposition even past open years<<
Yes, you can follow the automatic consent procedures to pick up all the missed depreciation. (You are deducting it currently, however, not amending the prior years.)
And no, this doesn't mean you can just skip depreciation when your income is low so you have it available for some later year!
Printer-friendly format
= Quickfinder Team Member
