Business & farm

SUPER helpful @Mike9241 ! I really appreciate the example, and totally get the underlying tax rules (I'm a reformed CPA 😀). And I'm glad to hear you agree that it's a TT bug; it should not be reducing K-1 Line 1 income on Sched E by the disallowed 179 deduction. 

Took forever, but I found a way to fix it, which seems to be the fix intended by TT: you go to the "Schedule K-1 S Corp [or p/ship] Additional Information and manually input the allowed 179 deduction (zero in my case). That corrected the income error but retained the carryforward on Form 4562. It also got rid of that red 0 you mentioned.

The only way I could figure out how to get to this form was to use the QuickZoom to enter additional information about the Sec 179 deduction (see pic below). Note that if you change it in box pictured below, the carryforward is then wrong, but if you drill down with the QuickZoom and change it to zero there, it seems to all work. 

It shouldn't be this hard! But at least it's now correct.