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previous page Previous Page: Publication 946 - How to Depreciate Property - Do You Have To File Form 4562?
next page Next Page: Publication 946 - How to Depreciate Property - Electing the Section 179 Deduction
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication
taxmap/pubs/p946-008.htm#en_us_publink1000107384

How Do You Correct Depreciation Deductions?(p14)


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If you deducted an incorrect amount of depreciation in any year, you may be able to make a correction by filing an amended return for that year. See Filing an Amended Return, next. If you are not allowed to make the correction on an amended return, you may be able to change your accounting method to claim the correct amount of depreciation. See Changing Your Accounting Method, later.
taxmap/pubs/p946-008.htm#en_us_publink1000107385

Filing an Amended Return(p14)


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previous topic occurrence Amended/Corrected Tax Return next topic occurrence

You can file an amended return to correct the amount of depreciation claimed for any property in any of the following situations.
taxmap/pubs/p946-008.htm#en_us_publink1000107386

Adoption of accounting method defined.(p14)


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Generally, you adopt a method of accounting for depreciation by using a permissible method of determining depreciation when you file your first tax return, or by using the same impermissible method of determining depreciation in two or more consecutively filed tax returns. For an exception to this 2-year rule, see Revenue Procedure 2008-52, on page 587 of Internal Revenue Bulletin 2008-36, available at www.irs.gov/pub/irs-irbs/irb08-36.pdf, as modified by Announcement 2008-84 on page 748 of Internal Revenue Bulletin 2008-38, available at www.irs.gov/pub/irs-irbs/irb08-38.pdf. For a safe harbor method of accounting to treat rotable spare parts as depreciable assets and procedures to obtain automatic consent to change to the safe harbor method of accounting, see Revenue Procedure 2007-48 on page 110 of Internal Revenue Bulletin 2007-29, available at www.irs.gov/pub/irs-irbs/irb07-29.pdf.
taxmap/pubs/p946-008.htm#en_us_publink1000107387

When to file.(p14)


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If an amended return is allowed, you must file it by the later of the following.
taxmap/pubs/p946-008.htm#en_us_publink1000107388

Changing Your Accounting Method(p14)


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Generally, you must get IRS approval to change your method of accounting. You generally must file Form 3115, Application for Change in Accounting Method, to request a change in your method of accounting for depreciation.
The following are examples of a change in method of accounting for depreciation.
Changes in depreciation that are not a change in method of accounting (and may only be made on an amended return) include the following.
See section 1.446-1(e)(2)(ii)(d) of the regulations for more information and examples.
taxmap/pubs/p946-008.htm#en_us_publink1000107389

IRS approval.(p15)


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In some instances, you may be able to get approval from the IRS to change your method of accounting for depreciation under the automatic change request procedures generally covered in Revenue Procedure 2008-52. If you do not qualify to use the automatic procedures to get approval, you must use the advance consent request procedures generally covered in Revenue Procedure 97-27, 1997-1 C.B. 680. Also see the Instructions for Form 3115 for more information on getting approval, including lists of scope limitations and automatic accounting method changes.
taxmap/pubs/p946-008.htm#en_us_publink1000107390

Additional guidance.(p15)
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For additional guidance and special procedures for changing your accounting method, automatic change procedures, amending your return, and filing Form 3115, see Revenue Procedure 2008-52, on page 587 of Internal Revenue Bulletin 2008-36, available at www.irs.gov/pub/irs-irbs/irb08-36.pdf, as modified by Announcement 2008-84 on page 748 of Internal Revenue Bulletin 2008-38, available at www.irs.gov/pub/irs-irbs/irb08-38.pdf.
For a safe harbor method of accounting to treat rotable spare parts as depreciable assets, see Revenue Procedure 2007-48 on page 110 of Internal Revenue Bulletin 2007-29, available at www.irs.gov/pub/irs-irbs/irb07-29.pdf.
taxmap/pubs/p946-008.htm#f13081f44

Table 1-1. Purpose of Form 4562

This table describes the purpose of the various parts of Form 4562. For more information, see Form 4562 and its instructions.

PartPurpose
I• Electing the section 179 deduction
• Figuring the maximum section 179 deduction for the current year
• Figuring any section 179 deduction carryover to the next year
II• Reporting the special depreciation allowance for property (other than listed property) placed in service during the tax year
• Reporting depreciation deductions on property being depreciated under any method other than Modified Accelerated Cost Recovery System (MACRS)
III• Reporting MACRS depreciation deductions for property placed in service before this year
• Reporting MACRS depreciation deductions for property (other than listed property) placed in service during the current year
IV• Summarizing other parts
V• Reporting the special depreciation allowance for automobiles and other listed property
• Reporting MACRS depreciation on automobiles and other listed property
• Reporting the section 179 cost elected for automobiles and other listed property
• Reporting information on the use of automobiles and other transportation vehicles
VI• Reporting amortization deductions
taxmap/pubs/p946-008.htm#en_us_publink1000107391

Section 481(a) adjustment.(p15)


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If you file Form 3115 and change from an impermissible method to a permissible method of accounting for depreciation, you can make a section 481(a) adjustment for any unclaimed or excess amount of allowable depreciation. The adjustment is the difference between the total depreciation actually deducted for the property and the total amount allowable prior to the year of change. If no depreciation was deducted, the adjustment is the total depreciation allowable prior to the year of change. A negative section 481(a) adjustment results in a decrease in taxable income. It is taken into account in the year of change and is reported on your business tax returns as "other expenses." A positive section 481(a) adjustment results in an increase in taxable income. It is generally taken into account over 4 tax years and is reported on your business tax returns as "other income." However, you can elect to use a one-year adjustment period and report the adjustment in the year of change if the total adjustment is less than $25,000. Make the election by completing the appropriate line on 
Form 3115.
If you file a Form 3115 and change from one permissible method to another permissible method, the section 481(a) adjustment is zero.
previous pagePrevious Page: Publication 946 - How to Depreciate Property - Do You Have To File Form 4562?
next pageNext Page: Publication 946 - How to Depreciate Property - Electing the Section 179 Deduction
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication