USA Need second opinion regarding Section 179 loan payments.

[shlootr]

I met with my accountant today to go over my S corporation taxes. In 2011, I purchased qualified Section 179 equipment and took out a loan that I am currently paying back. I depreciated the equipment in the first year and I have loan payments in 2013 of about 18K. Because the equipment was depreciated in the first year, my accountant has informed me that my 18K in loan payments will carry over to my personal 1040 as profit by my business. This does not make any sense to me. Any advice? Thanks in advance!

 

[kirby]

SOUNDS like a miscommunication by your accountant when speaking to you. Sounds to me that accountant should have said " The EXPENSE DEDUCTION for the $18K will carry over to your personal return (and reduce income there) when I report it on Schedule E which is called "Supplemental PROFIT or Loss.