Where do I find Section 179 Expense Deduction that was disallowed in 2021?

Forum|Forum|3 years ago
February 15, 2023
2 replies
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I have a vacation home that I rent out sometimes. I have previous years' losses on the property. Now, this year's TurboTax is asking, "Enter any section 179 expense deduction that was disallowed in 2021. Check last year's Form 4562 (Depreciation and Amortization) for this information."

I am looking at 2021 Form 4562 and have no idea where to find this information! Could someone please guide me to which line I need to be looking for? And what is the difference between "section 179 carryover" and "QBI section 179 carryover?"

Thanks in advance!

Carl11_2

Employee

There are a total of three form 4562's for your rental. Two of them print in landscape format. One is titled "Depreciation and Amortization Report" and is most likely the one you need. The other is titled "Alternative Minimum Tax Depreciation"

GeorgeM777

This disallowed deduction amount is shown on line 13 of Form 4562. You may be able to use the carryover amount to determine your section 179 deduction for the 2022 tax year. If you can use the carryover amount, enter that amount on line 10 of your Form 4562.

Section 179 allows for accelerated depreciation on certain types of business property. It is an option for businesses that decide to expense an item in a given year rather than to capitalize the item over its depreciated life.

Many individuals, including owners of businesses operated through sole proprietorships, partnerships, S corporations, trusts and estates may be eligible for a qualified business income deduction, also called the section 199A deduction.

The deduction allows business to deduct up to 20 percent of their qualified business income (QBI), plus 20 percent of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income. Income earned by a C corporation or by providing services as an employee isn't eligible for the deduction. Section 179 reduces taxable income and thus reduces the amount eligible for the qualified business income deduction.

@writermom3

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charjean47

Employee

It will not allow me to add the carryover amount on line 10 Form 4562. How do I do this? I have a carryover of disallowed deduction from 2021 to 2022 and it will not let me override it.