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Whether you’re an experienced do-it-yourselfer or doing your own taxes for the first time, this is your place to learn and share. Here you’ll find information and resources for using H&R Block’s online and software DIY solutions. You’ll also find links to more information to assist you on your DIY journey.

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Valued Pioneer
Posts: 3
Registered: ‎08-02-2017
Accepted Solution

Missing form 4562 and section 179 deduction

I have an S-Corp with a K-1 that lists ordinary business loss as -$849 and a section 179 deduction on line 11 for $30,240.

 

I also own commercial rental property (leased by the S-corp) with a net income on Schedule E Part I, line 26 of $21,585.

Part II of the Schedule E lists the S-corp $849 loss and the $30,240 section 179 deduction for the total loss of 31,089 for the S-corp.

 

When I run the accuracy check it comes up with a possible limitation on  the 179 deduction of $30,240 listed on the K-1.  When I go to form 4562 it is not marked as an item to print with the return and there is only one copy (with depreciation on line 17 for MACRS deductions for the rental property put into service in 2008). 

 

There is no 4562 showing the K-1 179 deduction for the S-corp.  Why is this missing?  I obviously entered the K-1 179 deduction because it is showing up on the Schedule E and in the accuracy check for the K-1

 

As for the Business Income Limit, the instructions in Pub 946 say I can include the taxable income and losses from ALL businesses I actively participated in and elsewhere it says rental property that is leased by one of your businesses counts as non-passive income.  Then under Taxable Income it says that includes wages,salaries, tips or other pay earned as an employee.  So if I am an employee of the S-corp, can I include my salary to qualify for the full section 179 deduction of $30,240 or can I only include the rental income of $21,585 minus the S-corp loss of $849 for a maximum 179 deduction of  $20,736?

 

Valued Pioneer
Posts: 3
Registered: ‎08-02-2017

Re: Missing form 4562 and section 179 deduction

I tracked it down.  The 4562 for the section 179 deduction was included in the S-corp tax return. It did include my salary as an employee of the S-corp in the income limitation calculation so the full deduction was allowed.