Sec 179 For Real Estate Professional not being allowed in TurboTax

[Yvonne S]

Hi. Per the described below I'm a Real Estate professional, but TurboTax is not allowing the Sec 179 Deduction as it is not considering my rentals as "business income" on line 11 of the 4562.  It's showing the assets as Sec 179, but limits the deduction as it has nothing on Line 11. 

My only source of income is Residential Rental income from 2 properties.  I spend more than 750 hours (documented hours) on rental activities.  I report this rental activity on Sch E (since per Pub 527, Sch C is only used if you provide substantial services that are primarily for your tenant's convenience, such as regular cleaning, changing linen, or maid service - which I do not do.) I've answered all the questions for the QBI part as well, in case that is relevant.

I've answered these questions in the step-by-step, yet TurboTax still isn't allowing the Sec 179 deduction for items such as furnishings and appliances, even though there is positive income shown on each column of the Sch E.   I see where I can "add" business income to line 11 of Form 4562 when I click through to the "Depreciation Options" worksheet but I would feel better knowing that the system is correctly understanding my situation and reporting properly.

Thank you in advance for any suggestions you can provide.

[tagteam]

In which area of the Rentals section are you entering the furnishings and appliances?

[tagteam]

You should be entering furnishings and appliances in the Assets/Depreciation section.

[Mike9241]

entering the amount on line 11 doesn't seem to do anything because the line then appears in red. 

the issue is Turbotax is not treating the income as business income 

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[Yvonne S]

Hi and thank you for your prompt reply.  Yes indeed I am entering them under the assets/depreciation worksheets and adding the amount to the line for Sec 179.  They are flowing through to the Form properly, but the issue is the income limitation, as it is not treating my rental business as a "business" because it's not on Sch C or those others, but rather on Sch E. In one of the pop-up windows TTax says that I cannot take the 179 because it is not a commercial property rental.