LLC losses - depreciation and adding to W2 wages - turbotax for business is limiting my decpreciation to the LLC income. I should be able to sutract losses or depreciation up to my combined income (W2 wages from company abcd and an LLC). How?

[Stretch62]

How can I override turbotax for LLC (partnerships) to show the full losses on schedule Ks?

[Carl]

turbotax for business is limiting my decpreciation to the LLC income

What kind of income? Passive income from rental property maybe?

Also a note about doing over rides in TurboTax. There are two things that you need to be aware of if you do an over ride.

1) You automatically invalidate the TurboTax 100% Accuracy Guarantee.

2) You will not be able to e-file the return. You will have no choice but to print, sign and mail the return to the IRS. Same is true for a state return if you're completing a state return also.

[Anonymous_]

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@Stretch62 wrote:

How can I override turbotax for LLC (partnerships) to show the full losses on schedule Ks?

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You need to clarify whether you are using TurboTax Business to prepare a 1065 for an LLC and, if so, how it is that you appear to be adding W-2 wages as income (from another company) on your 1065.

Please provide more precise details.

[Stretch62]

My wife has two sources of income.  First she makes wages and pays a lot of taxes.   Second, she formed an LLC in 2019.   The capital installed in that business was significant.  I thought with the 179 depreciation - you can pass through a loss higher than the income of just the LLC.   The software is limiting the amount of depreciation allowed to just the LLC net income.   Since she adds her LLC K1 to her the income from her separate job, Shouldn't we be able to pass through all of the  "loss" on the LLC in year 1?   The income does not cover all the depreciation of the installed capital.   Hope this helps.    

[Stretch62]

She has two sources of income - her main job which has substantial earnings on her W2 wages (and taxes).   Second, she started and LLC in 2019.   In year 1, we installed about $30,000 of capital into the LLC.    It's a renovation/handy man  business with my son (wife 80%, son 20%).   So TurboTax limits the deduction/depreciation of the LLC to the net income of the LLC.   Year 1, with depreciation, it'd a loss.   Her main job is with a big company.   The LLC is a renovation/handy man business.   I'm not as concerned about turbo tax 100% guarantee.   It's legal to all sources of income on her personal income tax return - her main job W2 wages and her schedule K from the LLC?  Does this help?

[Stretch62]

Not passive income.   It's a member managed LLC.

[Anonymous_ · Accepted solution]

I believe the problem is that the taxable income limitation is applied separately at the partnership and partner levels. 

See https://support.cch.com/kb/solution.aspx/000044509

[Stretch62]

The way I read this is the partnership LLC passes thru all losses, including depreciation, to my wife’s personal income tax return.  And depreciation deduction that passes thru cannot exceed all the sources of her income.    

makes sense as one could own 3 LLC partnership companies - 2 make money and pass thru net income.  A 3rd, new LLC, (is in year one) which is an investment year and has a pass thru losses, including depreciation, that exceed income of just this 3rd partnership).

net, u have to look at all sources of income on the personal tax return (job wages at company x and any LLCs.

somehow, when I printed the forms, the schedule K shows the total depreciation loss.   So I’m good.