Form 3115 for Missed Depreciation - 180 Day Rule

[Jennifer Bott]

Hello.

I am filing Form 3115 to start depreciating (and to catch up on missed depreciation) a rental property that I have had in service since 2010. I assumed 2015 will be the year of change, since I am figuring this all out now and plan on filing my 2015 tax return by April 15, 2016. However the Form 3115 instructions say it needs to be filed on or before 180 days after the beginning of the year of change, which in my case would be June 30, 2015. My questions are as follows:

1. If June 30 is the date, then I missed it. However I read elsewhere that this is considered an 'automatic method change', and some say just to complete the form and file it with my 2015 return, in which case I haven't missed it. Can you shed some light on this?

2. If I did miss it and can't make the change in 2015, then I am guessing I have to continue NOT depreciating the property for the 2015 tax year, as to do otherwise would be to switch to a permissible accounting method, without permission. Boy, that is a mouthful....

3. And then if question 2 is the case, the question arises as to when to file the form 3115 to start the change for 2016. Can I file it now and get it over with, or should I wait till after January 2016?

Thank you for any insight you have to offer!

[Brandon Hall]

@Jennifer Bott

That Rev Proc was implemented in 1996. Per the IRS Revised 2012 Instructions for Form 3115:

"Attach Form 3115 to the filer’s timely filed (including extensions) federal income tax return for the year of change.

File a copy of the Form 3115 with the IRS National Office unless the Appendix of Rev. Proc. 2011-14 or other published guidance requires you to file the copy with the IRS office in Ogden, UT, instead of the IRS National Office. File the copy no earlier than the first day of the year of change and no later than the date the original is filed with the federal income tax return for the year of change (or if applicable, for the tax year in which the CFCs or 10/50 corporation’s year of change tax year ends)"

Based off that, I stand by my original statement: "This means if the year of the change was 2015, you would file Form 3115 with your 2015 returns with the deadline of Oct. 15th, 2016."

Hope this helps!