Carryforward of disallowed Section 179 Depreciation Amount from 2020 to 2021, and then from 2021 to 2022

[Think57]

Hello.  In our 2020 return, we took Section 179, 100%, for two assets, for the total amount of $816.  However, because the rental property had a loss, the deduction was disallowed and and on Form 4562, indicated to be carried over to 2021's return.  On our 2020 Form 4562 for Depreciation & Amortization, Line 13, the correct total amount of of $816 was shown to be carried over to 2021.

We imported our 2020 return into our 2021 return, and on the 2021 Carryover Worksheet, on Line 24 of the "Other Carryovers" section, in the column for 2020, the $816 was correctly displayed.  So all looked good, except that ...

Turbo Tax highlighted the field in pink, indicating an error, and in the Forms View, the Carryover Worksheet had the red exclamation point next to it, indicating an error.  When I ran the Fed Review, the Carryover Worksheet Line 24, column 2020, was flagged as an error that needed to be fixed. 

In the Forms View, the "about Line 24 1st col" said that the amount here must be equal to the amount in the activity that generated it and be entered on the activity that originally generated the deduction.   How do I do this?  I tried the following using the Forms View:

- went to the Schedule E Worksheet for the property that had the two assets that we used Section 179 for (and they totaled to $816)

- found the "Carryovers to 2021 Smart Worksheet"

- For Line A: Section 179 carryover, manually entered $816 as a positive number

Here is what happened:

- Good news:  The Carryover Worksheet and Line 24 Column 1 in the Carryover Worksheet were no longer flagged as being in error by Turbo Tax, as seen in the Form View.  The pink shading of the field was gone, as was the red exclamation point by the form name Carryover Worksheet in the list of forms

- More Good news:  Turbo Tax automatically created a Form 4562 Depreciation & Amortization for the correct activity and correctly populated the Form 4562 with the $816 as a  carryover from 2020 in Line 10.  Turbo Tax also correctly placed the $816 in Line 13 to carryover this deduction to 2022 because the rental property also had a loss in 2021.

- The Bad News:  In the Forms View:  1)  Now in the Schedule E worksheet,  in the Carryovers to 2021 Smart Worksheet section, Line A is shaded pink and flagged as being in error by Turbo Tax.  2) The Schedule E Worksheet now has the dreaded red exclamation point next to in the Forms View

Is there a way to correct this so the $816 is carried over from 2020 to 2021 and then indicated to be carried over to 2022 without errors popping up in Turbo Tax?  What am I doing wrong here?

Thanks for your help, Think57

[PatriciaV]

Please return to Forms view and open the forms that have red exclamation marks. Now click Errors above the list of forms on the left side. At the bottom of each form in the large window, you will see an explanation of the error that needs to be fixed. it's possible your manual entries wrote over a calculated number or the number you entered needed a minus sign.

If you're unable to resolve the errors you see, please reply here, provide the form name and the full text of the message below that form.

[Think57]

Fed Form "Carryover Wks"

Error message for Line 24:  Line 24 (1st col) - The total Section 179 carryover shown here does not match the sum of the section 179 carryovers shown on each individual activity.  Please review your return and correct the carryovers on the individual activities so that they add up to the total shown here.

When I go to the individual activity, Schedule E Wks, and manually enter in the amount in the Carryovers to 2021 Smart Worksheet, Line A, get the following error:  Sec 179 Carryforward-Reg should not be entered, because this rental property is not a commercial property.  Though this did fix the error on the Carryover Wks.

Then after a Turbo Tax update, received a message in Turbo Tax while using Turbo Tax that the Sec 179 taken for 2020 taxes was disallowed because of some retro-application of revised tax rule.  So just to get through this, deleted the Section 179 entry in Line 24 on the Carryover Wks and deleted the entry on Line A in the Carryovers to 2021 Smart Worksheet.  Errors went away.  But now have given up a deduction that seems I can only get back by amending the 2020 return, which is too much work to do.  So will just eat this loss.

[jjlobato]

I am unable to resolve the section 179 carryover error. After going to forms, clicking on the form with the red exclamation point, then clicking on errors here is the explanation in the window below;

• section 179 carryforward-reg should not be entered, because this rental is not a commercial property.

I already tried entering zero as suggested by the error message, the error still did not resolve.

please help

[Think57]

Try deleting the zero you entered so there is no entry in that field

[jjlobato]

That worked!. Thank you

[realestateholder]

Having this same error on the Schedule E Worksheet, Carryovers to 2022 Smart Worksheet line A in the Regular Tax column while using 2022 TT Home & Business having automatically imported data from 2021 TT Home & Business return. Error reads Sec 179 Carryforward-Reg should not be entered, because this rental property is not a commercial property.  Fields were all auto populated from the 2021 TT data import; the property is indeed residential rental as it was on last years return and it reported a loss in 2021. All carryforward fields were populated by TT from 2021 to 2022.

[luxprop]

Still a problem and it was stopping me from finishing my taxes. I just deleted the supposed 2021 number and bingo, everything is now cool.  What would be really good would be if Intuit had a QA department that actually tested the whole thing before releasing it to its millions of users.

[charjean47]

I have the same problem as the person above; error message.  Don't know how to fix.  I tried tented the amount of carryover of disallowed Section 179 rom 2021 to 2022 on line 10 of Form 4562 and the program will not let me override this.  I am very disappointed.

[AliciaP1]

It would be helpful to have a TurboTax ".tax2022" file that is experiencing this issue.

You can send us a “diagnostic” file that has your “numbers” but not your personal information.  If you would like to do this, here are the instructions: 

In TurboTax Online, go to the black panel on the left side of your program and select Tax Tools. 

1. Then select Tools below Tax Tools. 
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent. 
4. You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number. 

In TurboTax CD/Download versions, go to the black panel on the top of your screen and select Online. 

1. Scroll down to and select Send tax file to Agent. 
2. You will see a message explaining what the diagnostic copy is.  Click send through this screen and then you will get a Token number. 

Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.   

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.

@charjean47 

[renaldorey]

I am having the exact same error.  I have a residential rental property, with a section 179 carryover, generated by turbotax 2021.  Now in 2022, it is giving an error that the carryover (which was autofilled by turbotax from previous year return) can't be entered because it's not a commercial property.

Is this a bug?  Clearly it is fine with using section 179 deductions on residential rental property (which as far as I can tell is allowed by the IRS after 2018).  So then if the deduction is fine, the carryover should be fine as well.

Is there any resolution to this?

[renaldorey]

by the way, the calculations seem to work ok, the 179 carryover is added to the current year, and the calculated property profit/loss looks correct.

But it generates an error in the review.

[rickdodds]

On my 2022 taxes I have an S corp with a loss and a section 179 deduction.  TT is allowing the 179 deduction on schedule E, despite the Form 4562 which shows it as not allowable and carrying forward to 2023.  Form 4562 has an error, but seemingly nothing can be done to fix the error.  Any ideas?

[PatriciaV]

Please clarify the Form 4562 error - what message do you receive? Can you tell what line number has the error?
@rickdodds 

[rickdodds]

Thank you so much Patricia. I have to apologize. I was trying to fix the 4562 error on the form and missed that TT in fact has follow up screens to make it work (i. e. to push unused 179 depreciation into a carry forward to 2023 while disallowing it for 2022 due to lack of business income). The fault was mine rather than TT’s. Again, thank you for your kind response.