If there is a material amount of land included in a rental building depreciable basis, should you use 3115 to correct the error?

Forum|Forum|6 years ago
June 12, 2020
6 replies
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Best answer by TaxGuyBill

In my opinion, it is a gray area. You can probably do whichever way works out best. 🙂

If you consider it as that you are depreciating the land, file Form 3115.

If you consider it as you are NOT depreciating the land but are just using an incorrect Basis for the building, then don't file Form 3115 and any corrections can only be done on amended returns.

itonewbie

Level 15

Yes.

---------------------------------------------------------------------------------Still an AllStar

M

mpbTaxLadyAuthor

Level 3

I was definitely thinking this was a yes but then I looked at the instructions for the 481 adjustments for the DCN code 7 changes, and I wondered if this was treated more as an adjustment to depreciable basis which should be corrected going forward.

T

TaxGuyBillAnswer

In my opinion, it is a gray area. You can probably do whichever way works out best. 🙂

If you consider it as that you are depreciating the land, file Form 3115.

If you consider it as you are NOT depreciating the land but are just using an incorrect Basis for the building, then don't file Form 3115 and any corrections can only be done on amended returns.

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