Entering the Section 179 deduction for partnership Schedule K-1, box 12 in Lacerte

For more Schedule K-1 resources, check out our Tax topics page for Schedule K-1 where you'll find answers to the most commonly asked questions.

Before you start

• The section 179 expense reported to the partner on Schedule K-1, box 12 is limited to the business income limitation reported on Form 4562, Depreciation and Amortization, Line 11. The program uses this amount, along with the total cost of section 179 property placed in service during the year from other sources, to complete Part I of Form 4562, Depreciation and Amortization.
• Part I of Form 4562 is used to figure the allowable section 179 expense deduction from all sources. Report the amount on Form 4562, Line 12, allocable to a passive activity from the partnership using the instructions for Form 8582.
• If the amount isn't a passive activity deduction, the program reports it on Schedule E (Form 1040), line 28, column (i). However, if the box in item D is checked, report this amount following the rules for publicly traded partnerships in the Partner's Schedule K-1 instructions.

To enter the section 179 deduction:

1. Go to Screen 22, Other Schedule K Items.
2. Scroll to the Deductions subsection.
3. Enter the amounts in Section 179 deduction [A].
   • Select the input field expander icon to enter multiple items or to allocate amounts to two more states.

What's new for tax year 2025

The One Big Beautiful Bill brings many changes to Section 179 and Special Deprecation Allowance. Here are some of the key updates:

• Qualified production property placed in service after July 4, 2025, the construction of which began after January 19, 2025, may be eligible for a 100% special depreciation allowance.
• Section 179 deduction dollar limits have been increased, including the amount for SUV's.
• For certain qualified property placed in service before January 20, 2025, a phase-down of the special depreciation allowance is in place.
• Certain qualified property placed in service after January 19, 2025 may be eligible for 100% special depreciation allowance or you can elect to take 40%.
• Domestic research and experimental expenditures may be amortized over either a 60 month, or 10-year period. Different periods apply for foreign research.

For full details, review the 4562 instructions.

Instructions for entering this in Lacerte are coming soon. For more information, see Applying the One Big Beautiful Bill changes to Depreciation in Lacerte.