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    What is the proper way to adjust an improper basis of a depreciable asset.

    meoleson
    Level 5
    ‎12-07-2019 06:27 AM

    The former preparer understated the basis of the asset by $50,000 when put into service in 2002.  Tax payer was not aware of the problem until this year when he moved his account as the tax preparer never provided copies of the depreciation schedules.

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    TaxGuyBill
    Level 15
    ‎12-07-2019 06:27 AM

    Start using the proper amount, and amend the 'open' years.  Otherwise, there isn't anything else that can be done.

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    12 Comments 12
    Just-Lisa-Now-
    Level 15
    Level 15
    ‎12-07-2019 06:27 AM
    2002 is a long time ago, are you sure the client is remembering the correct amount?  or is it real estate and its the land value that hasn't been deprecated?

    ♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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    meoleson
    Level 5
    ‎12-07-2019 06:27 AM
    He provided me with the documentation and copies of checks.
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    Just-Lisa-Now-
    Level 15
    Level 15
    ‎12-07-2019 06:27 AM
    ok, just checking...I have clients that cane remember what they paid for something a year ago, let alone 17 years ago!

    ♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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    TaxGuyBill
    Level 15
    ‎12-07-2019 06:27 AM

    Start using the proper amount, and amend the 'open' years.  Otherwise, there isn't anything else that can be done.

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    Terry53029
    Level 14
    Level 14
    ‎12-07-2019 06:27 AM
    Can't he use 3115 ?
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    TaxGuyBill
    Level 15
    ‎12-07-2019 06:27 AM
    No, using incorrect Basis is a "mathematical or posting error", not a "change in accounting".
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    rbynaker
    Level 13
    ‎12-07-2019 06:27 AM

    What asset?  Could the $50K have been allocated to non-depreciable land?

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    Just-Lisa-Now-
    Level 15
    Level 15
    ‎12-07-2019 06:27 AM
    that was my comment as well  😉

    ♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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    rbynaker
    Level 13
    ‎12-07-2019 06:28 AM
    I would think it's gotta be real estate if it's still depreciating after 16 years.
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    meoleson
    Level 5
    ‎12-07-2019 06:28 AM
    It is a shop building
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    Just-Lisa-Now-
    Level 15
    Level 15
    ‎12-07-2019 06:28 AM
    has anything been allocated to land?  Land isn't depreciable....so if the land is 50K, that why the basis is short by 50K

    ♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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    meoleson
    Level 5
    ‎12-07-2019 06:28 AM
    It is the building only that is understated.  The purchase price of the land is correct!!!!!!!!!!!!
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