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"Section 179 on multiple activities being limited" error message on Individual return

by Intuit Updated 1 month ago

When preparing a Form 1040 return where Form 4562: Depreciation and Amortization is involved, you may received the following error message in Final Review:

"You have elected Section 179 on multiple activities, or have a Section 179 deduction on a K-1 activity. The total amount of Section 179 you may deduct has been limited. You must reallocate the Section 179 on one or more activities. See Tax Help for Form 4562, line 12 for the details"

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ProSeries generates Form 4562: 179 Limitation if the taxpayer has Section 179 deductions for multiple activities, or has pass-through Section 179 deduction entered on a Schedule K-1, be it for a Partnership or an S Corporation.

Follow the steps for your activity below:

The following error is generating in ProSeries:

"Form 4562 Depreciation Options: Line 8 (State) is too large. You must reduce the current year state Section 179 deduction entered on one or more of the assets or vehicles for the State."

To resolve this error:

  1. Open the Asset Entry Worksheet or the Car and Truck Worksheet.
  2. Locate the State Depreciation section.
  3. Adjust the State Section 179 deduction for all states included in the return.

The amount of state section 179 allowed is on line 7 of the State Section 179 Dollar Limitation of the Form 4562 - Depreciation Options. All assets will need to be adjusted to no more than that amount.

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