S corp Auto Sale with bonus and 179 no gain showing up

Forum|Forum|4 months ago
February 22, 2026
2 replies
10 views

Can someone please help me understand why I do not show a 4797 gain of $ 17,000.00 on my K-1.

2014 purchased a 100% truck for 41,442. Used 179 of 25,000 and bonus of $ 8221 and depreciated the rest of the $ 8,221. I enter the sale date in 2025 of $ 17,000.00 and the only place I see it might go is on a basis statement. No 4797 no Long-Term Capital gain. so let me know if I need to give more information on this. I also tried entering a new asset with the same dates and amounts and still nothing. Plus on top of that the asset shows I have an $8,000.00 loss down below on regular tax asset gain (loss). So the difference seems to a 179 issue. Also the program shows a NOTE if a Section 179 deduction was allowed on this asset the sale does not carry to Form 4797. I still do not understand why I do not have a long term capital gain of $ 17.000.

Thanks

ProSeries Professional

sjrcpa

Level 15

What's on the K-1 stated separately?

Gain attributable to prior 179 deduction is ordinary income.

When both Section 179 and depreciation have been claimed on an asset, I don't know which gets "recaptured" as income first or if it is pro rata.

The more I know the more I don’t know.

T

toddoctorAuthor

Level 2

The K-1 does not show any of the disposal of the asset. My line 22 of the 1120-S is lets say 50k and that is the same as line 1 of the K-1. The 17,000 gain does not appear on my 1120-S or my K-1. The only thing I see is box 17 on the K-1 Other information has a code K* STMNT. Then below it says BOX 17 CODE K:

SEE ATTACHED SECTION 179 DISPOSITION REPORT.

So then on the shareholders disposition report for assets with section 179 expense taken it shows the auto gross sales price of $ 17,000. and the cost 41,442 depreciation allowed 16,442 and 179 - 25,000. So it is just like a summary but does not show it goes anywhere. I will try support but I think we have more luck here.

Thanks

sjrcpa

Level 15

I think your return may be correct. The shareholder takes that info from the K-1 statement and enters it on their return.

Remember, the Section 179 deduction passed through to them on their K-1 in the year it was taken.

The more I know the more I don’t know.

taxiowa

Level 8

Section 179 is passed down when taken from S-Corp to the owner. The individual getting K1 is not always the one in charge of preparing the 1120S. So therefore the S-Corp does not know if the 179 deduction was allowed to the individual. Individual my already have reached the limit of 179 property for that year or not have earned income to take the deduction. So upon sale the S-Corp is required to provide details of sale of 179 property but not put it on the actual K1. So you do have $17K profit. S-Corp and its tax software are just not sure if you qualified to take it when the asset was originally purchased.

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