How far back can I amend my returns if I never took depreciation expense on my rental property?

[stevef4571]

• A taxpayer is also generally prohibited from filing an amended return to change a method of accounting. Regs. Sec. 1.446-1(e)(2)(i) states that "a taxpayer who changes the method of accounting employed in keeping his books shall, before computing his income upon such new method for purposes of taxation, secure the consent of the Commissioner." Regs. Sec. 1.446-1(e)(3)(i) adds that "to secure the Commissioner's consent to a taxpayer's change in method of accounting the taxpayer must file an application on Form 3115 [Application for Change in Accounting Method] . . ."

https://www.thetaxadviser.com/issues/2020/aug/cares-act-previo[product key removed]ns.html

Edit: ugh. the forum is chopping that link above. Here is a short url that should redirect to it.

https://shorturl.at/bszHV

https://www.wealthyaccountant.com/2021/09/20/form-3115-cost-segregation-study/

[b87lar]

@AmyC I have a missed depreciation of about $80k (never claimed it) of a rental property that I also sold in 2023. My tax advisor chose to compensate via 3115...but in the full amount, not $50k over multiple years as you are suggesting in your post. Could you please clarify: is the 50k de minimis option a choice or a requirement? If it is a choice - what would be the criteria I should look at to decide. Thank you very much for this helpful post of yours! 

[M-MTax]

My tax advisor chose to compensate via 3115...but in the full amount, not $50k over multiple years as you are suggesting in your post.

Because line 28 is for a positive adjustment which is not what you want. When you miss depreciation you make a negative adjustment. Your tax advisor handled it correctly.