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We have an S-Corp with a negative Net Income, we've

We have an S-Corp with...
We have an S-Corp with a negative Net Income, we've maintained a negative Net Income for a few years carrying over the deductions from the section 179 since we cannot use it, due to the negative income. We are given the option to take the 100% deduction that will automatically roll over to the following year, my question is, can I transfer this deduction to my K-1's or is it not available because I have a negative net income? Should I take the full 100% on the first year, or is it safer to take per say 50% first year and spread the remaining credit through the life of the asset so that we don't run into having excess credits to use on the first qualifying year and lose the excess credit because it exceeds the income and it turns into of the a disallowed credit that cannot be carried rolled over to the next year therefore its lost? Every past year we've taken the 100% option where given, I wonder what happens to all these credits being rolled over year by year once we start to have income on our taxes? Will they all be available to use at the same time or, do I have the option to use what I need and roll over the rest? This concerns me, losing the credit because we chose to take the 100% the first year.
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Answered in 3 minutes by:
2/10/2018
Carter McBride
Carter McBride, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,231
Experience: Adjunct Professor
Verified

Hey! I'm Carter, I'm a CPA and can help you with this.

You can take bonus depreciation which is 50% (100% after mid-September 2017) and do not need to worry about the carryover anymore. If you have the basis, going with bonus over 179 is the better option for you.

Once you start to have income, you can use the credits. You can use enough to zero out income and then roll it forward.

There is no limit on how long you can carryforward a 179 deduction.

Hope that helps. If you need anything else, just let me know. If not, please leave a rating. Thanks!

Carter McBride
Carter McBride, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,231
Experience: Adjunct Professor
Verified
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