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Federal input screens

Screen Rent - Rent and Royalty Properties (1120)

General Information

This code is used to aid in determining in-state and out-of-state income for various state applications.
Enter
X
 to include the net income / loss from rental real estate activities in the calculation of section 179 business income limitation for an S Corporation.
Enter
X
 if the corporation has made an election under section 1.163(j)-9 in the prior year, or is making the election in the current year. The application proformas
X
 to this field when a
1
 was entered in the
Meets criteria for excepted trade or business under Section 163(j)
 field in the prior year.
The Section 163(j) election is an irrevocable election. If the election was made in the prior year, it does not need to be made again. Enter data in the
Section 1.163(j)-9 election
 statement dialog in the Elect screen in the Elections folder to make this election in the current year.
Enter
1
 for a complete disposition of the activity. Prior-year suspended losses are released and the activity, plus any other related screens, are deleted during next year's proforma process. Enter
2
 if this is a passive activity that was sold on an installment basis. Installment dispositions are treated as follows.
  • Allowed losses are calculated for the current-tax year by multiplying the overall loss, by the ratio of current-year gain recognized, divided by unrecognized gain as of the beginning of the tax year. Losses in excess of the allowed amount are suspended and proforma'd to the following tax year.
  • When the gain recognized in the current year exceeds all of the current and carryforward losses, all losses are allowed in the current year. Also, any other related screens are deleted during next year's proforma process. Any activity that is coded 2 with no passive loss carryovers, plus any other related screens, is deleted during next year's proforma process.

Income

This field applies to S Corporations only. Use this field only if you entered
1
 or
2
 in the
Type of activity
 field. Enter the amount of gain included as ordinary income from the sale of rental real estate property on Form 4797. This amount is subtracted from the gain calculated for Form 4797, Part II when calculating Form 1120-S, Page 1, Net gain (loss) from Form 4797, Part II, line 17.

Expenses

Enter the amount of business interest expense, not including floor plan financing interest expense. UltraTax CS/1120 automatically updates this field based on the amount in the
Interest
 field. If the
Section 1.163(j)-9 election was made for an excepted trade or business
 field on the Rent screen is blank, UltraTax CS/1120 sums the amounts in the
Business interest expense subject to limitation
 fields and transfers the total to Form 8990, line 1.
Enter 100 percent of expense for meals. The amount is automatically reduced by 50 percent and a Schedule M-1 reconciling amount for the reduction is generated.
Enter 100 percent of the meals expense subject to the hours of service limitations of the Department of Transportation (DOT). The amount is automatically reduced to 80 and a Schedule M-1 reconciling amount for the reduction is generated.
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