Business with a loss and section 179 purchases - how to specify automatic carryover to next year?

[ac-control]

Hello, as you can see, this business shows a loss on the K-1 form.  It is my understanding that Section 179 deductions will automatically pass to next year.  Is that correct?  What button must I press that this happens?

[ThomasM125]

Yes, the section 179 depreciation deduction carryover will show on the depreciation schedule 4562, on line 13 (carryover to next year). In the next year, it will be automatically populated on line 10 of that form (carryover of disallowed deduction from the previous year).

[ac-control]

Hello THomas M.,

First of all, thank you for responding so quickly. 

Thomas, I am still confused.  It seems that if I populate the Section 179 field of the asset information worksheet, the K-1 statement V populates even though the S-Corp is at a loss.  It also will show the 4562 as a current year Section 19 depreciation.  If I leave that blank, then the 4562 shows a depreciation.  Then, what field or checkbox must I click that the value in the K-1 statement V will carryover to next year?  What am I not doing?

[RobertB4444 · Accepted solution]

You can't take a 179 deduction when your business is operating at a loss.  You aren't entitled to it.  You may be able to take bonus depreciation and of course you can take regular depreciation.  But you can't take a 179 deduction and carry it into next year.  You can't take it at all.

Here is more information on who is able to take a section 179 deduction.