Year of Change

The year of change is the first tax year the applicant uses the proposed accounting method, even if no affected items are taken into account for that year. Each applicant (and filer, if also an applicant) must list its respective year of change.

Example. A calendar year taxpayer that has consistently capitalized certain building repair costs from 2015 to 2020 files a Form 3115 to change its method of accounting for building repair costs to begin deducting these repair costs in 2021. The year of change is calendar year 2021. Each applicant (and filer, if also an applicant) must list its respective year of change.