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Disposal of S Corp Assets Fully Depreciated With 179

WAStevens
Level 2

Hello,

I have an S Corp client that is closing their business because they never made a profit. I depreciated their assets using section 179, which has never been used. Last year, they sold all the equipment and I recorded a gain on the books. 

The guidance says not to use form 4797 to report the gains because of the section 179. No 4797 is coming up, but no 179 is showing on the K-1 in box 11. When I force 179 and gain on the K-1 through an override, then the schedule K and K-1 have a reconciliation issue. 

I use ProSeries for the client's personal return and do see that if I enter the K-1 over there with box 17 for the gain and section 179 filled-in that it computes ok, but only if I go in to box 11 and put in section 179 from a prior year form 4562. 

Is it ok to leave the K-1 with nothing in boxes 9 and 11, even though there was a gain and some section 179 from a prior year upon business closure? I'm struggling to understand the reporting requirements here. 

Thanks in advance!

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