Intuit HelpIntuit
SOLVED•by Intuit•5•Updated January 30, 2023
Follow these steps to report Section 179 expense recapture in the Individual module:
- Under Input Return, select Income.
- Select Disposition (Sch D, etc.), then Schedule D/4797/etc.
- Select Carryovers/Misc Info.
- Select the 4797 Carryovers & Recap tab.
- Under the Form 4797 section, scroll to the Recapture 50% or Less Business Use subsection.
- Enter the section 179 expense you deducted when the property was placed in service inSection 179 expense deduction.
- Enter the regularDepreciation allowableon the section 179 property from the time it was placed in service through the current year.
- Enter this recapture amount as income where you originally claimed the 179 deduction. For example, here's how you'd enter it on Schedule C:
- Under Input Return, select Business Income (Sch C).
- Select the Income Statement tab.
- Under the Income section, enter the recapture amount in the Other income field.
A critical diag (ref. 2025063) will generate whenever you’ve entered an amount in the field from step 6 to remind you to enter the recapture amount as income on the appropriate activity. This diagnostic won’t prevent you from e-filing the return.
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Now, let's delve into the specific steps outlined in the Intuit Help article regarding the reporting of Section 179 expense recapture in the Individual module:
-
Input Return and Income Selection:
- Navigate to the "Input Return" section.
- Choose "Income" from the options presented.
-
Selecting Disposition (Sch D, etc.):
- Within the "Income" section, opt for "Disposition (Sch D, etc.)."
- Further, select "Schedule D/4797/etc."
-
Accessing Carryovers/Misc Info:
- Under the same "Income" section, proceed to "Carryovers/Misc Info."
-
4797 Carryovers & Recap Tab:
- On the "Carryovers/Misc Info" page, locate and select the "4797 Carryovers & Recap" tab.
-
Recapture 50% or Less Business Use Subsection:
- Within the "4797 Carryovers & Recap" tab, scroll down to the "Recapture 50% or Less Business Use" subsection.
-
Entering Section 179 Expense:
- Input the Section 179 expense that was initially deducted when the property was placed in service.
-
Regular Depreciation Allowable:
- Enter the regular depreciation allowable on the Section 179 property from the time it was placed in service through the current year.
-
Reporting Recapture Amount:
- Report the recapture amount as income in the location where the Section 179 deduction was originally claimed.
-
Example: Entering on Schedule C:
- For instance, on Schedule C:
- Navigate to "Input Return."
- Select "Business Income (Sch C)."
- Go to the "Income Statement" tab.
- In the "Income" section, input the recapture amount in the "Other income" field.
- For instance, on Schedule C:
-
Diagnostic Reference (ref. 2025063):
- Note that a critical diagnostic (ref. 2025063) will be generated to remind you to enter the recapture amount as income on the appropriate activity. Importantly, this diagnostic won't hinder the e-filing process.
By following these meticulous steps, you can ensure accurate reporting of Section 179 expense recapture in the Individual module of Intuit's tax software, maintaining compliance with relevant regulations and maximizing your tax efficiency. If you have any questions or need further clarification, feel free to ask.
