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@Lewis J wrote:

1.  I have a partnership return which has a single commercial rental building

2.  Partners paid $45,375 K for a new roof in 2023 and have $80K of income

 

7.  I have used these Type of Asset codes:

                            J5 - Qualified improvement property

                            J6 - Roofs/HVAC/Fire/Alarm/Security

the $45,375 shows up on line 8 of Form 4562 but shows up in the Smart box immediately below as being limited on line A and then on line D as "Disallowed"

Can anyone assist in helping me figure out my error?  Thanks,

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A roof is not Qualified Improvement Property.  So you can't use J5 for a roof.

The problem is because it is a rental in ProSeries.  Section 179 only applies to a "trade or business", and ProSeries automatically assumes a rental is NOT a "trade or business".  Does this rental rise to the level of a "trade or business"?  The income limitation is on line 11 of Form 4562.  As you probably see, ProSeries does not factor in the rental when calculating that number. 

If the rental DOES rise the level of a "trade or business", you can double-click the box for 11 and it will bring you to a worksheet that you can manually add in the rental profit.