I can't seem to take the 179 deduction, although I have rental income to cover it. It seems the worksheet has my rental income as zero, therefore disallowing it.

Forum|Forum|1 year ago
March 30, 2025
2 replies
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Doesn't seem to be a problem with my situation, as I have read all the relevant IRS publications, but the software. F4562, line 11 is 0, but I have a profit.

TurboTax Online

Best answer by jonesylevin

A "business" for QBI purposes isn't necessarily the same as a "business" for other purposes. At any rate, TurboTax does NOT trigger the 179 income on the 4562 just because it calculates QBI.

I found the answer! It is a problem with the way Turbo Tax calculates business income on f4562. Line 11 only populates income from Sch C, Sch F, and K-1s. Nothing from Sch E, which is also business related and entitled to Sec 179 deductions. I found this information by right-clicking line 3a on the worksheet that feeds f4562. I added the income manually to line 3b, and all is well. Its a glitch, and I reported it to Turbo Tax customer service.

JamesG1

There are two issues which might be affecting the section 179 deduction on your tax return. Both are discussed in this IRS publication.

Page 4 Line 5

If you are married filing separately, you and your spouse must allocate the dollar limitation for the tax year.

Page 4 Line 11

The total cost you can deduct is limited to your taxable income from the active conduct of a trade or business during the year. You are considered to actively conduct a trade or business only if you meaningfully participate in its management or operations. A mere passive investor is not considered to actively conduct a trade or business.

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jonesylevinAuthor

Thank you for taking a guess. But neither is true.

1) I'm a single filer

2) I'm an active participant in my rental

The program seems to be disallowing the deduction because my income from my rental is zero on f4562. But it is not zero, as seen on schedule E.

AmeliesUncle

Does the rental rise to the level of a "Trade or Business"? That is a requirement for using Section 179. Merely being an active participant of the rental doesn't mean the rental rises to the level of a Trade or Business.

TurboTax assumes the rental does NOT rise to that level, which is why it does not put the income/loss on line 11 of Form 4562.

If the rental DOES rise to the level of a "Trade or Business", you would need to edit line 11 of Form 4562. However, I'm not aware of the online version of TurboTax having that ability. If it is not able to do that, you would need to use the CD/downloaded version or use another company's/brand of software (or go to a tax professional).

jonesylevinAuthor

thank you for that suggestion.

However, the QBI is calculated and deducted, implying TurboTax qualifies me as a business.

AmeliesUncle

A "business" for QBI purposes isn't necessarily the same as a "business" for other purposes. At any rate, TurboTax does NOT trigger the 179 income on the 4562 just because it calculates QBI.