Correcting Basis to Rental Property at time of Sale

[ea_rva aka acctgtaxmatters]

Client sold rental property in 2020 that she owned and rented for 8 years. Prior tax accountant was not carrying correct purchase price and was understating by $8,000. Cap Gains savings to my client of $1,000. Is the best fix to add to Asset Entry as a separate amount with a date placed in service of 01/01/2020?

[dkh]

Was that $8000 possibly the land allocated out of the purchase price ?   

If you have time, look back through recent posts.   I do recall a conversation with this same problem.

[TaxGuyBill]

The best fix is to just correct the Basis on the Asset Entry Worksheet.  There is no need to add another one.

While you could amend the last 2 or 3 years to claim the proper depreciation, it would only be a minimal amount of tax saving so it probably is not worth it.

[ea_rva aka acctgtaxmatters]

Thank you both for your replies. Land wasn't the issue. I think it was just a mistake carrying wrong value. I added as a separate asset calling it "to correct purchase price) since I didn't have any replies as of yesterday. I also didn't want to raise red flag with a different value than in prior years. All is well and client is happy with result.