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New Member
posted Sep 3, 2024 11:24:30 AM

Section 179 Deduction

TurboTax tells me that my section 179 deduction is limited to zero. I do not understand why. I have s-corp k1s that provide the deduction, and I have sufficient basis in my s-corp stock. Why is my deduction limited to zero?

0 3 3777
3 Replies
Level 14
Sep 3, 2024 12:02:09 PM

Does your tax return have 'earned' income on it, such as W-2s or self-employment income (usually on Schedule C)?

New Member
Sep 3, 2024 12:37:48 PM

No, there was no earned income.

Level 14
Sep 3, 2024 12:44:54 PM

Section 179 is limited to the amount of your earned income.   It will carry forward to future years for whenever you do have earned income.

 

As a side note, make sure you are familiar with the requirement that the corporation to be paying you "compensation" that will be on a W-2 (and all of the work and cost that is related to being on payroll).