Rental property had wrong basis calculated in 2017.

[chavon1]

I have a client who was doing their own taxes in 2017 when they converted their primary residence to a rental property. The basis for the property was figured incorrectly and is significantly lower than it should be. We would like to correct the basis and missed depreciation. Is Form 3115 the best way to correct the missed depreciation? Do I need to change the depreciation for 2019 on the existing 4562 or create a new line item for 2019 and forward. Would amending 2017 and 2018 be a better way to approach the issue? Thank you for your help.

[Terry53029 · Accepted solution]

You need to amend. The reasons for filing an amend instead of 3115 are:

• You claimed the incorrect amount because of a mathematical error made in any year.
• You claimed the incorrect amount because of a posting error made in any year.
• You claimed the incorrect amount on property placed in service by you in tax years ending before the statute of limitations has expired.
• You are changing the amount of Section 179 claimed or not claimed.
• Election to apply the $2,500/$5,000 de minimis safe harbor rules.