Partnership’s Minnesota Form 4562 — Example 2

The section 179 expensing amount of $80,000 is split between Sven and Lena based on their pro rata share of the partnership, as is the $25,000 for Minnesota purposes. Each partner’s pro rata share of the partnership’s section 179 expensing add back is reported on the partner’s Schedule KPI.
Flow-through calculations: Sven’s pro rata share of federal section 179 expense deduction reported on his federal Schedule K-1 is $48,000 [$80,000 (partnership’s federal Form 4562, line 12 amount) x 60 percent (Sven’s partnership percentage)]. Lena’s pro rata share of the deduction reported on her federal Schedule K-1 is $32,000 ($80,000 x 40 percent).
Since the partnership’s section 179 expense limit for Minnesota is $25,000, each partner must re-compute their section 179 expense for Minnesota purposes to arrive at their state add back. Sven’s Minnesota Schedule KPI expense amount is $15,000 [$25,000 (partnership’s Minnesota Form 4562, line 12 amount) x 60 percent (Sven’s partnership percentage)]. Lena’s pro rata share of the deduction reported on her Minnesota Schedule KPI is $10,000 ($25,000 x 40 percent). See the following example forms for these calculations.
The $80,000 of farm income is apportioned $48,000 (60 percent x $80,000) to Sven and $32,000 (40 percent x $80,000) to Lena.