partnership and 179 deduct

[Marie]

Partnership has an ordinary loss so 179 deduct doesn't show up on the K-1.  But both partners have other business income on their individual return.  Is the 179 deduct allowable on their 1040 against other income, even though the partnership income is negative?  Do I need to manually put in the 179 deduction on the K-1.  I've tried and it isn't an override.

[Marie]

Did I mix up facts too much?  As ATX does it, if net loss of partnership and 179 deduction, the 179 deduction does not flow to the K-1.  Does that mean it can't be taken against other income on the partners individual income tax if he has other business income?  Or do I put in manually

[Abby Normal]

Switch to bonus depreciation instead of 179. 179 is limited at the entity level first. In S corps you add the ordinary income and officers' wages to get the income limit. I've never done a partnership with 179 and guaranteed payments, but it might be similar.

[jklcpa]

Yes, the limitation for a partnership is ordinary trade/business income or loss without t/e income and without the deductions for guaranteed payments or the 179 itself.

Marie, do not override. If the limitation isn't met at the partnership level it will be a carryover and won't be on the K-1.  Abby Normal's suggestion will work, if the partner really wants a higher deduction now. 

[Marie]

ok, thanks for the responses.  i'll switch to bonus