IRS Form 3115 for changing from no depreciation to depreciation
5 Replies
Melissa Logue
posted almost 2 years ago
We need to fill out From 3115 as depreciation was not claimed for five years on our property. Besides having a CPA do our entire taxes is there assistance with just this form anyone knows of?
Linda Weygant
Investor and CPA from Arvada, Colorado
replied almost 2 years ago
Most CPAs will not prepare just one form. It's all or nothing because the ways the forms flow into one another are highly dependent on each other. Your 3115 will flow through to the Schedule E which then may or may not flow into an 8582 and all of that has to be checked and reviewed to make sure everything came together properly. This is way before you start then figuring out how much of that is eligible for the 199A exclusion.
Also, if you look at the instructions for the 3115, you'll note the following at the bottom:
Time Per Response
Recordkeeping ............... 60 hours, 1 minute
Learning ................... 16 hours, 25 minutes
Preparing .................. 20 hours
Sending ................... 32 minutes
While the IRS frequently overestimates the amount of time a mostly organized taxpayer takes to put together these forms, I think the above is actually not a horrible estimate for this particular form. A competent CPA who is used to working with these forms can get the recordkeeping and preparation down to about 1/4 - 1/5 that time, but the learning is no joke.
Getting a competent CPA on board for this is going to be in your best interest. Interview CPAs to find out how much experience they specifically have with the 3115. If they pause for a few minutes and you hear them furiously googling on their keyboard, go ahead and just hang up and move onto the next one.
Michael Plaks
Tax Accountant / Enrolled Agent from Houston, TX
replied almost 2 years ago
Originally posted by @Melissa Logue :
We need to fill out From 3115 as depreciation was not claimed for five years on our property. Besides having a CPA do our entire taxes is there assistance with just this form anyone knows of?
Not a DIY project, sorry. I would not even delegate it to my well-trained staff.
Basit Siddiqi
Accountant from New York, NY
replied almost 2 years ago
@Melissa Logue
Who prepared the tax returns and missed depreciation for 5 years?
I would not trust that person to continue doing the returns.
Form 3115 is not a simple form to file.
I do not touch requests from tax-payers who want me to fill out one form. Most practitioners know this is likely a one-time job and there is no future revenue from the person.
Paul Allen
Financial Advisor from Virginia Beach, VA
replied almost 2 years ago
IRS estimates 32 hours to learn + prepare? Maybe if you're only doing DCN 7/107s.
Good golly I hate that form!
Welcome to BP! Best of Luck with Your Real Estate Investments!
Natalie Kolodij
(Moderator) -
Accountant from Charlotte, NC
replied almost 2 years ago
I'm just here to also reiterate what a PITA that form is. It's not an easy one.
I just want to make sure this is really emphasized so that when someone inevitably googles "How hard is the 3115" this thread comes up and they realize why one of us says we charge extra to complete it.
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