Section 179 deduction limitation and allocation

Forum|Forum|4 years ago
March 24, 2022
3 replies
58 views

On my only K-1 this year there is a Section 179 deduction. I am a passive partner for this company and it seems that this is a passthrough deduction. TurboTax on for 4562 indicates that there is a problem on line 12 BUT all the numbers seem to add up. I have no other activities to "allocate" this deduction but TT is complaining.

What to do / what are my options? Thanks.

PatriciaV

Level 15

Form 4562 Line 12 is the total of your current Section 179 deduction plus carryovers from prior years. This total is subject to a business income limitation. In other words, you cannot deduct more than the income that was reported from this activity. Did the K-1 report income as well as the Section 179 deduction?

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TygahAuthor

Level 2

Thanks for your response!

My K-1 did report income equal to roughly 3x the Section 179 deduction. Form 4562 doesn't seem to ask for the reported income and Line 12 is computed a $0.00 and Line 13 gives a 2022 carry-over of the full amount of Section 179 deduction listed on my K-1.

Hope this helps ... and, thanks again.