59(e) research not deducted

Forum|Forum|1 year ago
September 3, 2024
2 replies
7 views

K-1 from 100S, passive. No federal deduction on 12c. California Line 12c lists an amount of 59e Research & Experimental expense. This amount is not being deducted on Schedule CA against the passive income from this S Corp. I don't know why.

Ca does not conform so it isn't required to be amortized.

There is a research credit Line 13m which might be interfering or coordinating in some way.

Lacerte Tax

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strongsilenceAuthor

Level 10

There is no basis limitation. So that is not preventing the 59(e) deduction

Aside, maybe interesting: What is the reason this is not a Box 12J item on the K-1?

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strongsilenceAuthor

Level 10

These costs are deductible. The LC guidance says, "If these expenses are deducted in full in the current year...". Has the S Corporation already deducted them and are presenting them separately on Line 12 in case the TP chooses to amortize them?

Note: LC support told me that I need to contact the IRS. I'm mad about that.

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strongsilenceAuthor

Level 10

Answer: Nonpassive activities allow this deduction.

Question: Should the nondeductible amount be carried forward? It is not appearing the carryforwards list.

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