you are doing nothing wrong. 179 is not subtracted from line 1. it's a separate k-1 entry, line 11, that will be entered on the taxpayers k-1 in their individual return. it is there that business income will be determined to see if there is enough to deduct the entire 179. there may be an alternative to 179 which is not limited to business income. its 100% bonus depreciation if the property qualifies. bonus depreciation is not separately stated so it will reduce line 1 on the k-1.
