JMc wrote:

- quote -

Still on the subject but not a reply is the case I had
today. S corp had a profit of about 40,000 before any
current year's depreciation and had new equipment in 2005
costing about 47,000.

My mission, and I chose to accept it, was to calculate the
right mix between section 179 and 7 year property at .1429
in order to get the 179 deduction to exactly match the S
corp profit.

Can you do it?

ChEAr$,
Harlan Lunsford, EA n LA
thu 9 Mar 2006 [at] hh

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"Kelly" <kgilbert[at]interactionassociates.com> wrote:

- quote -

You are limited at the corporate level first. Don't forget,
any wages paid to the shareholder (from the corporation
involved here) are income in computing the business income
limitation.

Josh

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Kelly wrote:

- quote -

Then your understanding is ... uh.. "incomplete."

Section 179 deduction is calculated at the entity level only
without regard to any other W2 earnings, etc.

this I learned and had to amend a client's return once upon
a time.

Oh well, live and learn, right?

ChEAr$,
Harlan Lunsford, EA n LA

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It is my understanding that the 179 deduction can not be
used to generate a loss on any entity. Thus you can not do
what you are trying to do.

However, a schedule c can generate a loss from 179 to offset
wages provided the overall 1040 does not go into a loss
situation.

In the first case the entity is the 1120S. In the second
it is the 1040 and not the 1040 C.

Hope that this helps

Rgs,

Mark

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I have a taxpayer who is a 100% shareholder of an S corp.
I am completing the 1120S and related form 4562 (Depr &
Amort). I would like to claim a 179 deduction in excess of
the "Business Income Limitation" on line 11 of the 4562.
Line 11 shows the business income from the S corp only. The
taxpayer has income from other business sources (spouses
employment) for which he would like to use the 179
deduction. It is my understanding that this is allowed,
but I can not figure out how to report it on the S corp
return form 4562 and K-1. Any help would be greatly
appreciated.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >