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I have worked up an S-corp return and the associated
individual return and my QBI number on the K-1 from the S-crop is inflated by prior
section 179 taken. I have no proceeds or
gain. After entering in the transaction
at the individual level there is no reduction of QBI for the previous addition
of Prior section 179 to the S-Crop QBI.
So, no proceeds, no recapture but I get QBI. Seems software is inflating QBI. Is there any considerations to be made in the
software input section or should I just expect to manually override this when I see it?
Previous answers to similar questions identified the issue would resolve its self at the individual level, but I do not see the software making considerations of that sort.
Thanks,
Example: S-crop Ordinary income of 100k, Previous section 179 taken on assets disposed is 38k, proceeds = 0, recapture = 0 assets were old and no proceeds received. Lacerte is taking the 100k of Ordinary income and adding the 38k as a QBI income under "Ordinary gain (Loss) on disposition of Section 179 assets" for a total QBI of 138k. At the individual level, there does not appear to be an adjustment to reduce QBI by the 38k to bring it down to the 100k which is what I'm expecting.
Best Answer Click here