Question

Section 179 Deduction

Forum|Forum|1 year ago
September 3, 2024
1 reply
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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?

A

AmeliesUncle

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

J

JRS49Author

No, there was no earned income.

A

AmeliesUncle

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).