Stepped up in basis missed on business assets

USA Discussion in 'Businesses / Corporations' started by cdicpa, Jan 22, 2018.

  1. cdicpa


    Jan 21, 2018
    Likes Received:
    Client was Sch C for many years. Died Jan 2014. Spouse took over business, filed for new EIN etc. Failure to step-up basis by 1/2 FMV on depreciable business assets discovered 2017. 2014 year of death is still an open year. I can’t determine if this is a “Change of Accounting Method” requiring a Form 3115 and a section 481(a) adjustment or if I need to just amend the returns before 2014 statute runs out in April.

    I have beat my head in researching all of this and it’s not clear to me. I don’t see where this error was a “impermissible” method changing to a permissible one? My gut tells me I can’t amend and a 3115 is required but I can’t wrap my head around this. My biggest concern is if I file a 3115 and that’s not correct and it requires amended returns then my time may be out to amend in time before I know. I’m considering filing the amended, putting the client on extension for 2017, and if it gets kicked back then I’ll at least have time to file the 3115 by the extension due date???
    cdicpa, Jan 22, 2018
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  2. cdicpa

    Drmdcpa VIP Member

    Aug 2, 2017
    Likes Received:
    Amend the return. I have seen the step up missed before. Too many times sad as it is. I have amended returns to get back large sums.
    Drmdcpa, Jan 22, 2018
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