IRC § 179 property of a partnership or S corporation

Partners and S corporation shareholders who receive a federal Schedule K-1 reporting a casualty or theft involving property for which the IRC § 179 expense deduction was previously claimed and passed through to the partners or shareholders must use the worksheet below to calculate the adjusted basis of the property (line 20 amount).

Line 19: If you are claiming a loss from a fraudulent investment arrangement and you are not filling out Section C, you must enter the name, taxpayer identification number (if known), and address (if known) of the individual or entity that conducted the fraudulent arrangement. Complete the rest of Section B.

Line 20: Cost or adjusted basis usually means original cost plus improvements, minus depreciation allowed or allowable (including any IRC § 179 expense deduction), amortization, depletion, and so on. Special rules apply to property received as a gift or inheritance. See Itemized deductions and review the 2017 IRS Publication 547. If you inherited the property from someone who died in 2010 and the executor of the decedent’s estate made the election to file federal Form 8939, refer to the information provided by the executor or see Itemized deductions and review IRS Publication 4895.

Partners and S corporation shareholders to calculate adjusted basis of IRC § 179 property worksheet (Keep for your records)

1 Gross sales price 1 __________ 2 Cost or other basis 2 __________ 3a Depreciation (excluding IRC § 179 expense deduction) 3a __________ 3b IRC § 179 expense deduction 3b _________ 3c Unused carryover of IRC § 179 expense deduction 3c _________ 3d Subtract line 3c from line 3b 3d _________ 3e Add lines 3a and 3d 3e _________ 4 Adjusted basis. Subtract line 3e from line 2 and include on line 20 4 __________

Lines 23 and 24: For details on determining FMV, see the instructions for lines 5 and 6.

Loss on each item calculated separately: Unlike a casualty loss to personal use real estate in which all improvements are considered one item, a casualty loss to business or income-producing property must be calculated separately for each item. For example, if casualty damage occurs to both a building and to trees on the same piece of real estate, measure the loss separately for the building and for the trees.