TaxGuyBill
Level 15

In my opinion, it is a gray area.  You can probably do whichever way works out best.   🙂

If you consider it as that you are depreciating the land, file Form 3115.

If you consider it as you are NOT depreciating the land but are just using an incorrect Basis for the building, then don't file Form 3115 and any corrections can only be done on amended returns.

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