Section 179 deductions should be included in QBI income, correct?

Forum|Forum|6 years ago
December 7, 2019
6 replies
43 views

I just did a Form 1120S and Line 21 Code V (QBI Income) does not include Section 179. I can see this being correct as of course the entity does not know if the shareholder is going to be limited on Section 179.

But if they are able to take the Section 179, I need to make a manual adjustment here, correct? Right now, without me doing so, the QBI income and therefore deduction the taxpayer is getting is too high.

Is there a better place for me to correct this than just manually adjusting what I put in for Code V when I input the K-1.

Or is this just a loophole/gift and the Section 179 does not reduce QBI income. I can't find any support of that though.

ProSeries Professional

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Best answer by itonewbie

QBI for the K-1 should be reduced by §179 on the individual return for the reason you mentioned. Think this is not working as it should, at least for 1120S, across all of Intuit's ProConnect tax products. The fix for Lacerte/PTO is scheduled to be released later this week but not sure about PS.

FWIW, QBI is working properly for Sch C and 1065 K-1 with §179 on Lacerte/PTO.

T

TaxGuyBill

If I remember correctly, that adjustment is done on the 1040 when calculating the QBI. However, the last I heard, QBI in connection with K-1s is not working yet.

George4Tacks

Level 15

ProSeries may have the same problem as Lacerte https://accountants-community.intuit.com/articles/1796713-inv-25078-partnership-and-s-corporate-calculation-of-199a-and-section-179

Answers are easy. Questions are hard!

itonewbieAnswer

Level 15

QBI for the K-1 should be reduced by §179 on the individual return for the reason you mentioned. Think this is not working as it should, at least for 1120S, across all of Intuit's ProConnect tax products. The fix for Lacerte/PTO is scheduled to be released later this week but not sure about PS.

FWIW, QBI is working properly for Sch C and 1065 K-1 with §179 on Lacerte/PTO.

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