S-Crop claiming section 179 does not affect the business income

[ue1]

S-corp claims section 179 deduction on business equipment.

However, when I updated the amount I noticed that there is no change in the business income on line 1 of K-1. The business had sufficient income, so that's not the issue. When I removed section 179 expense it did not change the business income either. What am I doing wrong?

[tagteam]

Check Line 11 of your K-1(s); it is a pro rata share item and does not reduce Line 1.

[Anonymous]

you are doing nothing wrong. 179 is not subtracted from line 1. it's a separate k-1 entry, line 11, that will be entered on the taxpayers k-1 in their individual return.  it is there that business income will be determined to see if there is enough to deduct the entire 179.  there may be an alternative to 179 which is not limited to business income. its 100% bonus depreciation if the property qualifies.   bonus depreciation is not separately stated so it will reduce line 1 on the k-1.   

[tagteam]

I agree that bonus depreciation is probably the better choice, assuming the property qualifies.

However, it should be made clear that there are a couple of other considerations, perhaps the most important being bonus depreciation must be applied to all property within a specific class (i.e., the election cannot be made on a property by property basis as can Section 179).