Form 1120-S Schedule K Lines 11 to 13 (2025)

Updated October 18, 2026. Quick answer: Schedule K lines 11 to 13 are the deductions and credits the S corporation passes to its shareholders instead of using itself: the section 179 deduction, charitable contributions, investment interest, other deductions and the credit lines. Line 11 is figured on Form 4562, and each credit line points to the form that figures it.

Line 11: section 179 deduction

The form prints “Section 179 deduction (attach Form 4562)”. The instructions say “Complete Form 4562, Part I, to figure the corporation’s section 179 expense deduction.” and “The corporation doesn’t take the deduction itself but instead passes it through to the shareholders.” They continue: “Attach Form 4562 to Form 1120-S and show the total section 179 expense deduction on Schedule K, line 11.” The Part I mechanics are explained at Form 4562 lines 1 to 5.

Basis still moves at the corporation level: “it must generally still reduce the basis of the asset by the amount of the section 179 deduction it elected, regardless of whether any shareholder can use the deduction”. For shareholders: “Don’t complete box 11 of Schedule K-1 for any shareholder that is an estate or trust”. The shareholder copy is at Schedule K-1 box 11.

Lines 12a and 12b: charitable contributions

For 12a the instructions say “Cash contributions must be supported by a dated bank record or receipt.” and “Enter cash charitable contributions made during the tax year.” They add “Attach a statement to Form 1120-S that separately identifies the corporation’s contributions for each applicable code below.” The written acknowledgment rule reads “No deduction is allowed for any contribution of $250 or more unless the corporation obtains a written acknowledgment from the charitable organization that shows the amount of cash contributed.”

For 12b the instructions say “If the deduction claimed for noncash contributions exceeds $500, complete Form 8283 and attach it to Form 1120-S.” The noncash form is explained at Form 8283. The codes for the shareholder copy are described at Schedule K-1 box 12.

Lines 12c to 12e: investment interest, section 59(e) and other deductions

Line 12c: “Include on this line the interest properly allocable to debt on property held for investment purposes.” The instructions add “Investment interest expense doesn’t include interest expense allocable to a passive activity.” Shareholders use it with Form 4952.

Line 12d: “Enter on line 12d the qualified expenditures paid or incurred during the tax year for which a shareholder may make an election under section 59(e).” The reason the corporation passes it through: “Because the shareholders make this election, the corporation can’t deduct these amounts or include them as AMT items on Schedule K-1.”

Line 12e: “Enter deductions not included on line 11, 12a, 12b, 12c, 12d, or 16f.” and “On the line to the left of the entry space for line 12e, identify the type of deduction.” For itemized deductions (code Z) the instructions say “don’t enter expenses related to portfolio income or investment interest expense reported on Schedule K, line 12c, on this line.” For code ZZ: “Include any other deductions not reported using codes A through AC.”

Lines 13a to 13g: credits

The credit section opens with “Section 42 provides a credit that can be claimed by owners of low-income residential rental buildings.” For 13a: “If the corporation invested in a partnership to which the provisions of section 42(j)(5) apply, report on line 13a the credit reported to the corporation in box 15 of Schedule K-1 (Form 1065) using code C.” For 13b: “Report on line 13b any low-income housing credit not reported on line 13a.”

For 13c: “Enter on line 13c the total qualified rehabilitation expenditures related to rental real estate activities of the corporation.” The form’s caption is “Qualified rehabilitation expenditures (rental real estate) (attach Form 3468, if applicable)”. For 13d: “Enter on line 13d any other credit (other than credits reported on lines 13a through 13c) related to rental real estate activities.” For 13e: “Enter on line 13e any other credit (other than credits reported on lines 13a through 13d) related to rental activities.”

For 13f: “Enter on line 13f any biofuel producer credit attributable to trade or business activities.” and “Figure this credit on Form 6478, if applicable.” Also “Include any amount shown on Form 6478, line 2, in the corporation’s income on Form 1120-S, line 5.”

For 13g: “Enter on line 13g any other credit, except credits or expenditures shown or listed for lines 13a through 13f or the credit for federal tax paid on fuels (which is reported on line 24c of page 1).” If there is more than one type, “attach a statement to Form 1120-S that separately identifies each type and amount of credit for the following categories.” The instructions then list credits by code, each naming its form. Two examples are “Complete Form 5884 to figure the credit.” for the work opportunity credit and “Complete Form 6765 to figure the credit.” for the research credit. The shareholder copy is at Schedule K-1 box 13.

Where the number comes from

Line 11 comes from Form 4562, Part I. Lines 12a and 12b come from the corporation’s records of gifts made, with statements by code. Line 12c comes from interest on money borrowed to hold investments, 12d from the qualified expenditures, and 12e from the other deductions the corporation has, labeled by type. The credit lines come from the forms the instructions name for each credit.

Where it goes next

Lines 11 to 12e reduce the line 18 result: the caption reads “From the result, subtract the sum of the amounts on lines 11 through 12e and 16f”. The instructions pass each item to the shareholder boxes, and for Form 8283 they say “The corporation must attach a copy of its Form 8283 to the Schedule K-1 of each shareholder receiving an allocation of the contribution deduction shown in Section A or Section B of its Form 8283.” The next Schedule K lines are on the lines 14 to 16 page, and the earlier lines are on the lines 5 to 10 page. See Form 1120-S for the whole return.

Edition and line numbers

This page reads the 2025 Form 1120-S and its 2025 instructions, the current files irs.gov served on 2026-10-18. They are the files for the tax year 2025 return, filed in 2026. The title line of the form reads “U.S. Income Tax Return for an S Corporation” and the header reads “For calendar year 2025 or tax year beginning”. Check the tax year printed on the form you are filling in and use that year’s line numbers, because a different year’s form can number or word its lines differently.

Common mistakes

• Deducting section 179 on page 1. The instructions say “The corporation doesn’t take the deduction itself but instead passes it through to the shareholders.”
• Skipping the written acknowledgment for a large gift. The instructions say “No deduction is allowed for any contribution of $250 or more unless the corporation obtains a written acknowledgment from the charitable organization that shows the amount of cash contributed.”
• Putting investment expenses on line 12e twice. The instructions say for code Z, “don’t enter expenses related to portfolio income or investment interest expense reported on Schedule K, line 12c, on this line.”

Related: Form 1120-S, Form 4562 lines 1 to 5, Schedule K-1 box 11, Schedule K-1 box 12, and Schedule K-1 box 13.

Sources

• Instructions for Form 1120-S, U.S. Income Tax Return for an S Corporation (2025): https://www.irs.gov/pub/irs-pdf/i1120s.pdf
• Form 1120-S, U.S. Income Tax Return for an S Corporation (2025): https://www.irs.gov/pub/irs-pdf/f1120s.pdf

Read from the IRS documents linked above on October 18, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.