Catch up on the depreciation
you never claimed

As far back as MACRS itself, which began in 1987. The catch-up is filed as a change in accounting method on Form 3115, and the IRS lets you take the whole missed amount as a single Section 481(a) adjustment on your current return, however many years it covers. In practice the older the purchase, the more depreciation has accumulated and the larger the catch-up. How the Form 3115 catch-up works.

No. That is the point of the look-back method. Instead of reopening old returns, your CPA files Form 3115 with your current return and claims the missed depreciation as one adjustment, called a Section 481(a) adjustment. Prior years stay closed. We provide Form 3115 on request with your study, so your CPA has the form and the numbers together.

Filing Form 3115 for depreciation is a routine, IRS-recognized procedure, and this particular change is one the IRS grants automatically. What matters is that the study behind it holds up. Ours is built to the IRS Audit Technique Guide's own criteria for a quality study, so you can check our work against it. If the IRS questions your study, we respond at no additional cost with the documentation and methodology behind it. Representation before the IRS stays with your CPA.

It corrects it, the IRS's way. Depreciating a property straight-line when parts of it belong in shorter MACRS classes is treated as an impermissible method. Form 3115, filed under DCN 7, the automatic-consent change from an impermissible depreciation method to a permissible one, fixes it going forward and captures everything you missed as a single Section 481(a) adjustment on this year's return. It is automatic consent under the IRS's annual list of automatic changes, not a negotiation. What the IRS guide says.

The rate that was law when the property, or each renovation, actually went into service, not today's rate. Bonus depreciation ran at 100% under the TCJA through 2022, then stepped down to 80% in 2023, 60% in 2024, and 40% in 2025 for property acquired before January 20, 2025. The OBBBA restored 100% for property acquired and placed in service after January 19, 2025, which is the rate for property you buy today. A look-back study applies the rate for each vintage, and the Section 481(a) catch-up still recovers the regular accelerated depreciation you missed whatever the rate. Your CPA confirms which rate governs your property.

Your CPA can file it. Form 3115 for a depreciation change is a standard filing, and the report is formatted so they can work from it directly: an executive summary, the full asset schedule, and a year-by-year depreciation schedule. If your accountant has questions about the analysis, we support them at no additional cost. Are you a CPA? See how we work with firms.