KrisD15
Expert Alumni

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The issue is that Section 179 is not allowed on rental property if it is passive income. 

 

The first year there is an option for the taxpayer to over-ride and enter Section 179 deduction, but it will not carry-over to schedule E the following year. 

It would only be available if you are treating the rentals as a trade or business. 

In that case the deduction would be taken on the business return. 

 

 

 

@haggest 

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