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Subject Author Date
Depreciation Question saltoftheearth15 03-08-2008
Posted by saltoftheearth15 on March 8, 2008, 2:34 am
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 How can I go from not claiming allowable depreciation on a rental
property to claiming allowable depreciation without creating an
unauthorized change to my accounting method. I do not care about the
past several years lost depreciation and have no desire to amend those
returns. I would also like to avoid having to file a 3115 at this
time. Is it acceptable to simply start claiming the allowable
depreciation that I have failed to claim the last several years?

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Posted by Bill on March 8, 2008, 10:19 am
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saltoftheearth15@yahoo.com posted:

>How can I go from not claiming allowable
>depreciation on a rental property to claiming
>allowable depreciation without creating an
>unauthorized change to my accounting
>method. I do not care about the past several
>years lost depreciation and have no desire to
>amend those returns. I would also like to avoid
>having to file a 3115 at this time. Is it
>acceptable to simply start claiming the
>allowable depreciation that I have failed to
>claim the last several years?

Though there may be some hoops to jump through, it would seem to be
worth doing so, since you're goind to be _charged_ for the "imputed"
depreciation when you sell the property, whether you took it or not.

You are also allowed to go back and file 1040X returns for the years
when you didn't claim and could have. There is a full explanation in
Pub 527, under "Claiming the Correct Amount of Depreciation."

If changing your accounting method is involved, while getting the
consent of the IRS is mentioned, in some instances, that consent is
automatic. See chapter 1 of Pub 946.

Bill

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<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
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Posted by removeps-groups@yahoo.com on March 8, 2008, 11:30 am
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On Mar 8, 7:19 am, an_ordinary_guy_...@hotmail.com (Bill) wrote:
> saltoftheeart...@yahoo.com posted:

> >How can I go from not claiming allowable
> >depreciation on a rental property to claiming
> >allowable depreciation without creating an
> >unauthorized change to my accounting
> >method. I do not care about the past several
> >years lost depreciation and have no desire to
> >amend those returns. I would also like to avoid
> >having to file a 3115 at this time. Is it
> >acceptable to simply start claiming the
> >allowable depreciation that I have failed to
> >claim the last several years?

How does the accounting method affect the depreciation?

> You are also allowed to go back and file 1040X returns for the years
> when you didn't claim and could have. There is a full explanation in
> Pub 527, under "Claiming the Correct Amount of Depreciation."

But you can go back only 3 years.

> If changing your accounting method is involved, while getting the
> consent of the IRS is mentioned, in some instances, that consent is
> automatic. See chapter 1 of Pub 946.

That document is awfully long.

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<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
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Posted by Arthur Kamlet on March 8, 2008, 12:55 pm
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>On Mar 8, 7:19 am, an_ordinary_guy_...@hotmail.com (Bill) wrote:
>> saltoftheeart...@yahoo.com posted:
>
>> >How can I go from not claiming allowable
>> >depreciation on a rental property to claiming
>> >allowable depreciation without creating an
>> >unauthorized change to my accounting
>> >method. I do not care about the past several
>> >years lost depreciation and have no desire to
>> >amend those returns. I would also like to avoid
>> >having to file a 3115 at this time. Is it
>> >acceptable to simply start claiming the
>> >allowable depreciation that I have failed to
>> >claim the last several years?
>


>How does the accounting method affect the depreciation?


One theory, and I do not buy it in this instance, is that once
you have used a particular accounting method for two tax years
in a row, you have established your method of accounting.

So going from not claiming depreciation two years in row, to
claiming it, could be taken as a change in method. But since
the original "method" is not a reasonable one, I would think
the two years in a row rule would not hold. If you disagree,
then a 3115 is needed to notify the IRS of a change in method.
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

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<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Harlan Lunsford on March 8, 2008, 2:56 pm
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Arthur Kamlet wrote:
>> On Mar 8, 7:19 am, an_ordinary_guy_...@hotmail.com (Bill) wrote:
>>> saltoftheeart...@yahoo.com posted:
>>>> How can I go from not claiming allowable
>>>> depreciation on a rental property to claiming
>>>> allowable depreciation without creating an
>>>> unauthorized change to my accounting
>>>> method. I do not care about the past several
>>>> years lost depreciation and have no desire to
>>>> amend those returns. I would also like to avoid
>>>> having to file a 3115 at this time. Is it
>>>> acceptable to simply start claiming the
>>>> allowable depreciation that I have failed to
>>>> claim the last several years?
>
>
>> How does the accounting method affect the depreciation?
>
>
> One theory, and I do not buy it in this instance, is that once
> you have used a particular accounting method for two tax years
> in a row, you have established your method of accounting.
>
> So going from not claiming depreciation two years in row, to
> claiming it, could be taken as a change in method. But since
> the original "method" is not a reasonable one, I would think
> the two years in a row rule would not hold. If you disagree,
> then a 3115 is needed to notify the IRS of a change in method.

I can't quite see that failure to claimed allowable depreciation
in previous years and then resuming it is a change in accounting
method. The "method" was there from the first, although the
error was "forgetting" to claim depreciation officially.

Therefore no form 3115 is called for.


ChEAr$,
Harlan Lunsford, EA n LA

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<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

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