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Disposing of a partnership or S-corporation asset with a prior-year section 179 deduction

SOLVEDby IntuitProSeries Professional5Updated December 10, 2021

This article will show you how to dispose of a partnership or S-corporation asset with a prior-year section 179 deduction in ProSeries Professional.

When working on a 1120-S or 1065 return, if the asset had any section 179 deduction, the disposition won't be reported on Form 4797, Form 4684, Form 6252, or Form 8824. The sale flows to the K-1 for the partner or shareholder to enter the disposition on the individual return. The disposition information is reported on the Shareholder's Disposition Report for all Assets with Section 179 Expense Taken.

This report can be viewed by clicking on the K-1 179 Report (Partner/Shareholder Name) in the left navigation panel under the Forms In Use section.

This report is part of the K-1 and is distributed to the partner or shareholder. It isn't reported on the 1065 or 1120-S return. However, it is reported on the partner or shareholder's individual return. The Supplemental Information Smart Worksheet will automatically populate limited information regarding section 179 dispositions.

For more information, refer to the IRS Instructions for Form 4797.

ProSeries Technical Support can't provide tax advice or advise you on tax-specific treatment. You may wish to ask your tax-specific questions on the Intuit Accountants Community.

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