Leaderboard

The full release of Drake tax software for 2023 is now available. Let the fun begin!

A few years ago on The TaxBook forum, someone posted the following (https://forum.thetaxbook.com/forum/discussion-forums/main-forum-tax-discussion/298864-written-data-security-plan-for-tax-preparers#post299231): Given how we are repeatedly reminded how important it is to have a written plan sitting on the shelf, it's odd that no one wants to actually provide a template of any kind. The closest I've seen is Tax Tip 2019-119 from the IRS, issued Aug 29 2019. So, using the available guidance in that tax tip, here is my written plan. Note that the law doesn't say it has to be very good, just that I have to have one. So, done. * Include the name of all information security program managers. Me. * Identify all risks to customer information. Fire, theft, flood, earthquake, government seizure of property, software malfunction, mis-addressed or mis-delivered communications. No risk from employees because I have none. * Evaluate risks and current safety measures. Yes, they are all risks. Current safety measures include physical locks, a dog on the premises, up to date professional computer software with all vendor supplied security patches applied within one week of release, and encryption of customer data in digital form. * Design a program to protect data. Immediately scan client paper documents into secure encrypted digital storage, then return or shred the paper. Use unique passwords for each login requiring a password. Do not share passwords. Use MFA for tax software access. * Put the data protection program in place. Yes. * Regularly monitor and test the program. Take this plan off the shelf once per year and read it. Test: get a colleague to come over and promise to buy them a meal if they access customer information in my tax office without my help, within 30 minutes.

The self study class from Brass Tax that Lion posted about sounds like a good investment for only $20

Yes, it would all be deducted in 2023. No, remember depreciation is allowed or allowable, so not submitting the 3115 would be a failing to do your due diligence.

Here's to health, happiness, and prosperity in 2024!

Happy Healthy and Prosperous New Year in 2024 to all my dear colleagues here on the forum.

Just curious how you have now determined it had not been depreciated either in full or part? Also, how are you going to determine if the improvements (either in full or in part) have not been written off as expenses over the years? In order to include the improvements in the 481(a) adjustment, you will need the date placed in service to determine the amount of depreciation allowed or allowable.

Just go through the 3115 step by step. You only have to do it once. The total depreciation will be deducted only once in the tax year to be filed. It won't be that bad.

I've never done this, but recently walked through the process with a colleague (they did the work - I only looked up instructions and made suggestions). At first glance it looks complicated, but the process is fairly straightforward once you get the "allowable" depreciation calculation finished and determine the exact codes to use on the Form 3115. IMO, you should charge the client well for this work - if you haven't done this before it will require some intensive study, but the client will benefit greatly from your extra effort.

If depreciation was never deducted then a Form 3115 needs to be filed correcting the depreciation which would allow the deduction of the combined years of depreciation in the current year. Then the sale of the house could be recorded using the correct accumulated depreciation. "Form 3115, Change in Accounting Method, is used to correct most other depreciation errors, including the omission of depreciation. If you forget to take depreciation on an asset, the IRS treats this as the adoption of an incorrect method of accounting, which may only be corrected by filing Form 3115."