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@Devildog8589 wrote:

 In a Passive Activity Sec 179 is not allowed,

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It has nothing to do with being passive.  Does the rental activity rise to the level of a Section 162 Trade or Business (versus being merely an 'investment property')?

If not, Section 179 is not allowed regardless of whatever the shareholders qualify for.

If it does rise to the level of a Trade or Business (it would still be passive due to being a rental activity), then do as I said before and it will flow to the K-1.