I am using ATX to prepare both a 2007 partnership and an individual return. The partnership has zero income because of a 179 deduction. The K-1 however shows ordinary income 12,500 on line one. Line twelve 179 deduction shows 12,500 and line 14 self employment also shows 12,500. Can this be right? When I transfer it over to his personal return he has no income and no federal income tax but 1,500 in self employemnt tax. Is 179 not deductible for self employemnt tax purposes?
Thanks for your help.