K1, Box 17, Code K

[WileyCPA]

Trying to enter K1 information from an S Corp on an individual return. Following a two step process listed as a solution from intuit community. When I enter step one I get a critical diagnostic saying recapture amounts from 4797 part IV should be entered in the input area for the form where the deduction was entered originally. How can I fix this? I have also entered step two, still the critical diagnostic.

Step One: Entering Section 179 Recapture:

1. Click the Detail tab
2. Navigate to Screen 17 - Dispositions 
3. Select the button for Carryovers/Misc
4. Locate the section Form 4797
5. Locate the subsection Recapture 50% or Less Business Use
6. Enter the total amount of recapture in the Section 179 expense deduction field
   • This input flows to Form  4797 Page 2,  Part IV,  Line 33

Step Two: Entering recapture as ordinary income and linking it to Schedule  K-1:

1. Click the Detail tab
2. Navigate to Screen 17 - Dispositions
3. Enter the Property Description, Date Acquired, Date Sold, Sales Price, Cost or Basis
4. Scroll down to the section Form 4797 
5. Enter "-1" in the field Depreciation allowed (-1 = none, triggers 4797)
6. Scroll down to the Section Corresponding Activity Information - Passive (8582) / At-Risk (6198) / Investment Tax (8960) 
   • Note: In 2012 and earlier this section is titled Related Activity Information - Passive (8582) / At-Risk (6198)
7. Select Schedule E (S corporation) from the Form Number of Related Activity drop down menu
8. Select the name of the K-1 from the Activity Name or Number (Ctrl+T) drop down menu
9. Check the box to Include in at-risk/basis limitations
10. If the asset being disposed of was used in a passive activity, go to Passive Disposition
11. Enter 3 in the field 1 = Complete Disposition, 2 = Partial, 3 = Separately stated on K-1      
    • This input reports the Section 179 recapture as ordinary income on Form 4797,  Page 1,  Schedule E, p2, and includes the recapture in basis calculations

[George4Tacks]

"When I enter step one I get a critical diagnostic saying recapture amounts from 4797 part IV should be entered in the input area for the form where the deduction was entered originally. How can I fix this? I have also entered step two, still the critical diagnostic"

This is a Critical Diagnostic Warning - check the box and ignore it. Step one simply prints a number on the 4797. It does not do anything with that number. The warning is that you need to account for that number when you go to Step 2.