For a number of years, client has depreciated the land (20%) rather than the improvements (80%) on the $438,278 total basis of a rental property.  The Depreciation method is 27.5 years straight line.

For the current year and future years, can this be adjusted/corrected in the return by overriding the amount of depreciation on the value of the land to $0 and entering a ‘new asset’ with a basis = Total basis of improvements less the amount depreciated on the land in all prior years. The resulting ‘new asset’ would be depreciated based on 27.5 years straight line. The new asset would be entered on asset entry worksheet

OR

Continue to depreciate the value of the land and entering a new asset with a basis= total basis of improvements divided by 27.5 less the amount depreciated on the land as described above.

Or perhaps more aggressively, depreciate the entire ‘new basis’ over the remainder of the 27.5 years.

If none of these approaches is appropriate, what is correct?