1040-US: Form 4562, line 11 - Business income limitation

Alerts and notices

Question

How is the amount of business income calculated for line 11 of Form 4562 used to determine the amount of section 179 deduction allowed for the current year?

Answer

To see the details of the calculation of Form 4562, line 11, go to Print > Preview and view the Not Required Statements.

The tax application calculates the amount of aggregate trade of business income by totaling the following amounts:

  • Wages
  • Household income (Not reported on Form W-2) from the Other Income statement in Screen Income.
  • Schedule C, net income or loss (if material participation and without section 179)
  • Schedule F, net farm profit or loss (if material participation and without section 179)
  • Form 4797, line 18, ordinary gain or loss
  • Schedule E, income or loss from line 41 (not including income loss from Publicly Traded Partnerships (PTPs) or passive activities, and without section 179)
  • Form 4835, net farm income or loss (if material participation and without section 179)
  • Capital gains or losses from business assets

To determine the amount on line 11, compare this amount with the amount on line 5 of Form 4562. The lesser of these two amounts is the amount that shows on line 11. You can force the amount of business income for section 179 purposes in the Business income limitation for section 179 (Force) field in Screen OthAsset in the Other With Return folder.

Related topic: Form 4562 - Depreciation and amortization FAQs (1040)


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