Question about amending prior year Schedule E
's for rental property
Assume it is realized that a former CPA incorrectly calculated depreciation on a residential rental for years 2006 through 2012 and that now the home has "sold" due to foreclosure.
Assume the tax payer has determined it is most correct to amend these prior year returns.
Assume that the change to how depreciation is calculated is due to "attached" rental improvements, 2 new toilets and a dishwasher, being depreciated separately via 200% DB, HY convention, 7 year useful life instead of how they should have been depreciated: S/L MACRS mid-month over 27.5 years.
Besides using the appropriate forms to indicate amendment is being requested/submitted, is there anything else special about how this should be treated?
Should an explanatory attachment be included that says something in particular, or will the simple explanation I provided above suffice?
Are there issues this might create that I should be aware of?
Is it possible to do this: change the depreciation method and basis of depreciation for the building and the improvements mentioned above, i.e., any special elections or anything have to be made?