I bought items in 2016, elected the Section 179 Ded but the items I elected 179 arent being deducted above or below line 21 on the 1120s gross income for tax purposes.

[susanky]

I notice that the deduction is coming off on the K1 but not where I want it and that is line 21 for taxable purposes that flows onto my 1040 from the 1120s.  What I'm I doing wrong.  Thought you can take 100% deduction in first year you buy new items.

[SweetieJean · Accepted solution]

Line 14. Depreciation

Don't include any section 179 expense deduction on this line. This amount isn't deducted by the corporation. Instead, it is passed through to the shareholders in box 11 of Schedule K-1. However, reduce the basis of any asset of the S corporation by the amount of section 179 expense elected by the S corporation, even if a portion of that amount can't be passed through to its shareholders this year and must be carried forward because of limitations at the S corporation level. 

https://www.irs.gov/instructions/i1120s/ch02.html