Section 481(a) adjustment not flowing to 1065/8825

Forum|Forum|2 years ago
March 19, 2024
2 replies
20 views

Hi Friends,

Just started working on a rental 1065 Return and it looks like the previous tax professional misclassified a roof replacement as "flooring" in 2022. Fortunately, the business was started in 2022 and the mistake was caught early. However, I know I need to enter a 481(a) adjustment to increase income on the 1065/8825 to account for the "over-depreciated" asset.

Form 3115 is now successfully printing for me and has Part IV 481(a) complete, however the increase in income is not flowing to the 1065/8825. I tried filling out other parts of the form and read through each question to make sure I wasn't missing something. I'm sure I am though.

Anyone have any ideas?

Thanks!

This topic has been closed for replies.

Best answer by abctax55

F.3115 is informative - the calculations don't flow anywhere.

Enter the adjustment manually on the F 8825

abctax55Answer

Level 15

F.3115 is informative - the calculations don't flow anywhere.

Enter the adjustment manually on the F 8825

HumanKind... Be Both

S

SiriusAuthor

Level 3

This is very helpful. Thank you!

rbynaker

Level 13

Wouldn't an error in 2022 just get amended? (Or however partnerships get adjusted these days.)

I think it takes 2 years of "error" to be considered a method.

Rick

abctax55

Level 15

D'oh..... Rick, I think you're right.

And partnership amendments are that AUR (?) routine and depending on the election that was made, the hit is absorbed by the partnership OR passed out to the partners. My 'working knowledge' of the how is basically non-existent.

HumanKind... Be Both

S

SiriusAuthor

Level 3

I can see an argument for both. Claiming more depreciation than allowable would trigger Form 3115. Whereas, a calculation or posting error would make the case for an amendment. As a note, the materiality of this change is $1,800. The business experienced loss in 2022 and 2023.

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