Trade or business income calculation

C Corp trade or business income

UltraTax CS calculates trade or business income for a C Corporation by totaling the following amounts:
  • Taxable income before net operating loss and special deductions
  • Section 179 expense deduction allowed in current year

S Corp trade or business income

UltraTax CS calculates trade or business income for an S Corporation by totaling the following amounts:
  • Ordinary business income (loss)
  • Net rental real estate income (loss), if you select the option to include net income or loss in the calculation for Section 179 business income on the Rent screen or 4835
  • Other net rental income (loss)
  • Royalty income (loss)
  • Net section 1231 gain (loss)
  • Shareholder wages
If the amount on Form 4562, line 11 is less than the amount on line 5, UltraTax CS prints a "not required" statement for S Corporation clients that details the amounts used to calculate the business income limitation for Section 179.
You can force the amount of business income for Section 179 purposes in the
Section 179: Business income limitation (Force)
field on the
OthAsset
screen in the
General
folder.
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