Why does form 4562 line 11 show as zero?

[luxprop]

I am trying to use section 179 to expense appliances I replaced in four of my rentals in 2020, but I'm getting business income limitation (form 4562 line 11) of zero, even though the income is over $100,000.

[AmeliesUncle]

Section 179 is only allowed if the rental activity rises to the levels of a "Trade or Business".

TurboTax automatically assumes the rental does NOT rise to the level of a "Trade or Business".

If your rental activity DOES rise to the level of a "Trade or Business", you need to enter/override Line 11.

If it makes you override it, you will not be able to e-file with TurboTax.

[luxprop]

I've been in the rental business for 33 years, and have had up to 15 properties.  I've used section 179 for minor items (like appliances) most years, and this has never come up in the past.  What has changed this year?  Is it because I've checked the Qualified Business Income box?  This hasn't come up in the past.

[AmeliesUncle]

As far as I remember, the program has always done this.  I am positive it has done this for the since 2018 (see next paragraph).

Up until a couple of years ago (2018), Section 179 was NOT allowed for residential rental properties, so I suspect you might be misremembering what you had done in prior years (unless you are referring to non-residential rentals).

As a side note, is there a reason why you are using Section 179 rather then the Special Depreciation Allowance ("Bonus" depreciation)?  Or even using the De Minimis election to just deduct the expense?

[luxprop]

Looking back on my 2018 return, I see, for example, that I specified "carpet replacement" as a Section 179 item of about $2300, but it looks like it was not included in expenses for that property.  It certainly wasn't flagged in the Federal Review, so I guess it was a program error.  Groan!  I really don't want to go back and re-file.
For this year, I went back and changed the Section 179 entries to Special Depreciation Allowance. as you suggested, but it still didn't change the bottom line.  

[AmeliesUncle]

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@luxprop wrote:

For this year, I went back and changed the Section 179 entries to Special Depreciation Allowance. as you suggested, but it still didn't change the bottom line.  

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Which "bottom line"?  Over all of your rentals, do you have a net loss?  Losses are often not allowed for rentals, and it is carried forward.

Or was there also personal use of that rental?

[cc1211]

Problem still is not fixed as of 3 7 2022.   It is just a programming error that would be easy to fix if the programmer understood what is being asked.

[cc1211]

oops...as of 3 7 2023

[DianeW777]

Section 179 is allowed for appliance in real estate rental properties (tangible personal property). You can send us a “diagnostic” file that has your “numbers” but not your personal information.  If you would like to do this, here are the instructions: 

TurboTax Online:

Go to the black panel on the left side of your program and select Tax Tools. 

1. Then select Tools below Tax Tools. 
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent. 
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number. 
5. Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.  

TurboTax CD/Download:

If you like, you can send a copy of your return that will be scrubbed to eliminate your personal data by using these steps:

1. Click on Online in the top left menu of TurboTax CD/Download for Windows
2. Select 'Send Tax File to Agent'
3. Write down or send an image of your token number then place in this issue.
4. We can then review your exact scenario for a solution.
5. Please also tell us any states included in the return. 

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution. 

@cc1211 

[AmeliesUncle]

@DianeW777  There really isn't a need for a diagnostic file.  I explained what the program does in my original answer on top.  It is just how the program currently works.