2020 Form 1065 with 2020 section 179 carryover-My schedule M-1 is off by the section 179 carryover amount to tax year 2021. Where does the section 179 carryover for 2020 Form 1065 show up on the M-1? Should it flow through to the schedule M-1. If I put the section 179 carryover on Schedule M, line 4a it appears as an item on the books but not on the return.
In 2020 there is more 179 depreciation than there is business income so on form 4562 box 13 there is 19,501 (carryover of disallowed deduction to 2021. My schedule M-1 line 4a has 19,501 (expenses recorded on books this year and not included on Schedule K etc. line 4a depreciation) because of the 179 limitation and line 9 Income has zero. Re Schedule M-2- on screen 28 I checked the box recompute Sch M-2 line 3 if partnership books are not on tax basis. When I do this Schedule M-2, line 3 ordinary income is 19,501 greater than the book net income on line 1 of the Schedule M-1. But I took a look at what I did and the balance sheet is now out of balance due to the tax basis capital accounts. Now I am really confused. Do I need to check the box to "recompute Schedule M-2 line 3 if partnership not on tax basis" since difference tween books and tax have to do with a 2020 Section 179 c/o to 2021? I thought my tax returns were tax basis but got confused when I had a 2020 Section 179 c/o to 2021.
Thank you for your help.