I am reviewing tax returns from 2007-2010 for a client that knows the depreciation on his rental properties is not right. The CPA that prepared them has me uncertain on how to correct them. There are 2 properties however the Schedule E only shows 1 property with expenses and income for both properties listed under the 1. Depreciation was taken in 2007 for the property listed, none taken in 2008. Depreciation was taken in 2009 and 2010 however the amounts are incorrect. The depreciation schedule I requested reports using a 29 Yr SL. Obviously it should've been 27.5 Yrs.

I know I need to use Form 3115 to change the method on the 1 property listed on the Sch E. The problem I am having is knowing how to fix the other property. Can I amend the last 3 yrs adding the other property and separating the expenses to reflect it being in service and taking depreciation? Does Form 3115 need to be used for this property also. I have never dealt with Form 3115 before, does it allow me to take past unclaimed deprecation off on the current taxes? Any input would be great. I don't want raise a lot of red flags with the IRS but had the CPA figured depreciation correctly, my client would've saved over $2600 over the past 3 yrs.