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lnralston
New Member

Why is the section 179 deduction limited and how is the amount determined?

I am a general partner and we have section 179 deduction.  When I entered the amount on the K-1 and subsequently on schedule E, I was told that there was a limit to the amount we could claim.  Why is it limited and how is the limit determined?

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Accepted Solutions
CathiM
New Member

Why is the section 179 deduction limited and how is the amount determined?

The section 179 deduction is limited to your basis in the partnership. Check the bottom left corner of your K-1 to see what your ending equity balance in the partnership was. You must go into the Sch E worksheet to put in your basis, so TurboTax will know.  Use the forms mode, in Windows version of TurboTax of the top right of your screen.  Find and click on Sch E page 2 on the left of your screen.  At the top of Sch E page 2, click on the Quickzoom next to Partnership. Add a work sheet, name it. When the worksheet opens, go to the "L" section and put in your basis (capital balances).  You have to have a positive amount in the ending capital balance box to be able to use the section 179 deduction.  I attached 2 screen shots at the bottom here.

Also, an individual must have earned income on their own tax return to take the deduction. 

For the business, you may already know, these are the limits:

For 2017, the maximum Section 179 deduction is $510,000. If your total acquisitions are greater than $2,030,000 the maximum deduction begins to be phased out.  The business 

If the business is an S corporation, partnership or multi-member LLC, it cannot pass the Section 179 deduction on to shareholders, partners or members unless the business has income. 

https://ttlc.intuit.com/replies/5387864

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2 Replies
CathiM
New Member

Why is the section 179 deduction limited and how is the amount determined?

The section 179 deduction is limited to your basis in the partnership. Check the bottom left corner of your K-1 to see what your ending equity balance in the partnership was. You must go into the Sch E worksheet to put in your basis, so TurboTax will know.  Use the forms mode, in Windows version of TurboTax of the top right of your screen.  Find and click on Sch E page 2 on the left of your screen.  At the top of Sch E page 2, click on the Quickzoom next to Partnership. Add a work sheet, name it. When the worksheet opens, go to the "L" section and put in your basis (capital balances).  You have to have a positive amount in the ending capital balance box to be able to use the section 179 deduction.  I attached 2 screen shots at the bottom here.

Also, an individual must have earned income on their own tax return to take the deduction. 

For the business, you may already know, these are the limits:

For 2017, the maximum Section 179 deduction is $510,000. If your total acquisitions are greater than $2,030,000 the maximum deduction begins to be phased out.  The business 

If the business is an S corporation, partnership or multi-member LLC, it cannot pass the Section 179 deduction on to shareholders, partners or members unless the business has income. 

https://ttlc.intuit.com/replies/5387864

lnralston
New Member

Why is the section 179 deduction limited and how is the amount determined?

Thank you for your speedy reply.  I did what you said about completing the worksheet.  My question now is: why in Section A line 1b does it change my section 179 from $31868 to $30423?  The K-1 has already given only my share of the full partnership section 179.
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