Sec 179

[Unregistered]

I just completed S-corp tax return for 2005. There is a sec 179 dep on scorp return.

Scorp has a net income of $150,000. Sec 179 deduction does not reduce bottomline on scorp return (On first page) but amount is recorded on K-1 which then goes to Personal.

Questions:

(1) Do I need to record this transaction in QB as - Dr. Dep expenses & Cr. Accu dep?

(2) Cleint wants to contribute for profit sharing. Would Sec 179 have any impact or it is a non factor?

Thank you

[Unregistered]

Entry

Yes. You do need to make an entry.

Sec 179 can not create loss.

[Bees Knees]

(2) Cleint wants to contribute for profit sharing. Would Sec 179 have any impact or it is a non factor?

For an S corporation, you base profit sharing contributions on the W-2 wages, not the business profits. That is true for the shareholder/employees as well. Section 179 would have no effect on that.