In TT Business, how do I remove a Section 179 carryforward (due to prior year income limitation) for an asset I disposed of in current year?

[lwong18]

Went thru disposed assets screens and individual asset forms, but carryforward is still showing up on Line 13 of Form 4562.

[DawnC]

Upon a sale or other disposition of section 179 property, or a transfer of section 179 property in a transaction in which gain or loss is not recognized in whole or in part (including transfers at death), immediately before the transfer the adjusted basis of the section 179 property is increased by the amount of any outstanding carryover of disallowed deduction with respect to the property. This carryover of disallowed deduction is not available as a deduction to the transferor or the transferee of the section 179 property.

(2) Recapture under section 179(d)(10). Under § 1.179-1(e), if a taxpayer's section 179 property is subject to recapture under section 179(d)(10), the taxpayer must recapture the benefit derived from expensing the property.   Upon recapture, any outstanding carryover of disallowed deduction with respect to the property is no longer available for expensing.  In determining the amount subject to recapture under section 179(d)(10) and § 1.179-1(e), any outstanding carryover of disallowed deduction with respect to that property is not treated as an amount expensed under section 179.

[lwong18]

Thank you for your response.  I will double check that the basis is calculated based on the information provided.  However, where do I go in the Turbotax Business desktop software to adjust/remove the disallowed section 179 carryforward?  I can't find the correct area to remove the carryforward under Step-by-Step mode and the software will not let me delete the carryforward from Line 10 of Form 4562 under Forms mode.

The disallowed section 179 carryforward was made up of two assets.  I was able to find where to remove the section 179 deduction that was originally assigned to each of these assets in their Asset Information section of the Asset Entry Wks, but I do not know where to go in the software that will allow me to remove the overall disallowed section 179 carryforward that flows into Line 10 of Form 4562.

[PatriciaV]

Please clarify why you need to remove the Section 179 carryforward that was disallowed.

@lwong18 

[lwong18]

The disallowed section 179 deduction related to two assets which I disposed of in 2024.  I do not believe the carryforward should be applicable to 2025.  

[KrisD15]

If you disposed of the asset in Tax Year 2024, you can eliminate the Section 179 carry-over in the 2024 TurboTax software. 

Business tab

Continue to and select that particular business

Business Income and Expenses

Edit from list

Scroll down to "Assets Being Depreciated" under "Business Assets"    START or UPDATE

"Yes, I want to go to my asset summary"

Select EDIT for the item

Continue to the Section 179 Deduction screen and edit 

[lwong18]

Thank you for your response.  I did go thru the Dispose of Business Property screens for each of the two assets.  The difference is the Turbotax Business software version I'm using had already pulled in a Section 179 deduction amount for prior year even though technically the Section 179 amount was disallowed due to income limitations in the respective prior years.  I went into Forms mode to remove the Section 179 value for federal and state depreciation in each Asset Entry Wks.  This resulted in a current year depreciation calculation (not sure if this is correct, but that's what Turbotax Business did).  However, that did nothing to Form 4562 because the Section 179 carryforward is still being calculated there.  I do not know where else to look for the form which is the source for that carryforward value.

[ThomasM125]

The section 179 carryover loss is reported on line 10 of Form 4562. You can use the Forms menu option to look at the forms in your return. Find the Form 4562 and delete the carryover amount listed on line 10.