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A
Allen65
Level 2
February 25, 2022
Question

S Corp Gain (Loss) on Disposition of Section 179 Assets

  • February 25, 2022
  • 1 reply
  • 13 views

S Corp Gain (Loss) on Disposition of Section 179 Assets (sold autos) flowing to M-1 line 5a as nontaxable instead of taxable gain flowing to K-1.

 

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1 reply

sjrcpa
sjrcpa
Level 15
February 25, 2022

"flowing to M-1 line 5a as nontaxable instead of taxable gain flowing to K-1"

Not quite.

M-1 Line 5a is income recorded on books not included on Sch K Line 1 - 10.

Gain on assets where 179 was used does not appear on hose lines.

It gets passed through separately to the shareholders as a statement.

The more I know the more I don’t know.
    A
    Allen65Author
    Level 2
    February 27, 2022

    Yes, I agree but that is not what the software is doing and I do not know why.

      T
      TexCPA
      Level 3
      August 13, 2022

      It seems wrong, but it is supposed to be on the M-1, because it goes directly to the shareholder's K-1 box 17K. So the amount is not on Schedule K per se. You should find a report attached with the shareholder's K-1 showing the Section 179 taken. That will be reported on the 1040. 

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