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IRS Releases Guidance for ADS Depreciation Method Change

The IRS recently released Revenue Procedure 2021-28. This revenue procedure provides the process for how an electing real property trade or business can change its method of computing depreciation from a 40-year recovery period to conform to the retroactive 30-year recovery period for certain residential rental property under the Alternative Depreciation System (ADS).

New Depreciation Changes

Revenue Procedure 2021-28 provides details on changing the method of depreciation, allowing the taxpayer to make the change by either filing an amended return, an administrative adjustment request (AAR), or a Form 3115, Application for Change in Accounting Method. Further, the revenue procedure explains that a BBA partnership that filed tax returns and furnished IRS Form K-1’s prior to the issuance of the revenue procedure may choose to file an amended return instead of an AAR.

IRS regulations require specialized knowledge when preparing tax returns for affordable housing partnerships. The Affordable Housing Team at McKonly & Asbury has the expertise and experience needed to complete accurate tax returns. For more information, visit our Affordable Housing Services page and contact our team at


About the Author

Lindsey Haney

Lindsey joined McKonly & Asbury in 2014 and is currently a Senior Manager with the firm. Serving as the leader of the firm’s State and Local Tax Group, she assists companies with sales tax issues and state tax compliance as well as negoti… Read more

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