Question

S-Corp + Sole Proprietor & Section 179

Forum|Forum|3 years ago
October 6, 2022
2 replies
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I am a 50% shareholder in an S-Corp that is going to take a significant loss in 2022 ($150k)

During 2022 I also started a Sole Proprietorship which will also show a loss for 2022. I purchased a vehicle for this business (pickup that meets 179 spec's and will be used 75% for biz).

What is the best way of minimizing my tax liability?

Employee

Employee

This question is too broad with almost no facts.

Section 179 is limited to business income. Since it appears you have no business income, you will not benefit from any Section 179 in 2022.
If the business income limitation precludes you from benefiting from Section 179, any unused amount will be carried over.
You then need to project what 2023 will be like to determine if the carry over can be used then. If not, then you need to project 2024.
Depending on how savvy you are with numbers, you may want to do a time value of money analysis; comparing having a carry over of Section 179, determining what year you believe it will be utilized vs just taking normal depreciation.

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.