ATX 2014

Listed Property

For listed property other than vehicles, base the allocation on the most appropriate unit of time the property is actually used (not the time available for use). For example, if you use a computer 75 hours for business and 25 hours for personal use, the business percentage is 75%.

You must keep written records to support business use. For example, if you use your computer for business and personal use, keep a log of the hours you use the computer for each use. Do not submit this with your tax return, but keep it in your records.

Business Use Requirement

You can claim the section 179 deduction and a special depreciation allowance for listed property and depreciate listed property using the General Depreciation System (GDS) and a declining balance method if the property meets the business-use requirement. To meet this requirement, listed property must be used predominantly (more than 50% of its total use) for qualified business use. If this requirement is not met, the following rules apply.

Property not used predominantly for qualified business use during the year it is placed in service does not qualify for the section 179 deduction.
Property not used predominantly for qualified business use during the year it is placed in service does not qualify for a special depreciation allowance.
Any depreciation deduction under MACRS for property not used predominantly for qualified business use during any year must be figured using the straight line method over the ADS recovery period. This rule applies each year of the recovery period.
Excess depreciation on property previously used predominantly for qualified business use must be recaptured (included in income) in the first year in which it is no longer used predominantly for qualified business use.
A lessee must add an inclusion amount to income in the first year in which the leased property is not used predominantly for qualified business use.

Qualified Business Use

Qualified business use of listed property is any use of the property in your trade or business. However, it does not include the following uses.

The leasing of property to any 5% owner or related person (to the extent the property is used by a 5% owner or person related to the owner or lessee of the property).
The use of property as pay for the services of a 5% owner or related person.
The use of property as pay for services of any person (other than a 5% owner or related person), unless the value of the use is included in that person's gross income and income tax is withheld on that amount where required.

Listed Property is any of the following:

Any passenger automobile.
Any other property used for transportation. This includes trucks, buses, boats, airplanes, motorcycles, and any other vehicles for transporting persons and goods.
Any property of a type generally used for entertainment, recreation, or amusement (including photographic, phonographic, communication, and video recording equipment.
Any computer and related peripheral equipment unless it is used only at a regular business establishment and owned or leased by the person operating the establishment. A regular business establishment includes a portion of a dwelling unit if that portion is used both regularly and exclusively for business.
Any cellular telephone or similar telecommunication equipment.

Asset Categories/Sub-categories

The Fixed Assets form applies the special rules for listed property to the following sub-categories. Additional depreciation deduction limitations or section 179 limits apply to certain listed vehicles in the vehicle subcategories for Agriculture and the Vehicle (V) subcategories.

Agriculture (A) category:

Subcategory with description

12 - 5-yr Farm asset (listed)
14 - 7-yr Farm asset (listed)
19 - 5-yr Farm passenger vehicles
20 - 5-yr Farm SUV
21 - 5-yr Farm light truck and vans
2 - 5-yr Other vehicle (listed)

Furniture and Equipment (F) category:

Subcategory with description

4 - 5-yr Computers (listed)
8 - 7-yr Photo and other listed equip
12 - 7-yr Cellular telephone (listed)
15 - 5-yr Other (listed)

Vehicle (V) category:

Subcategory with description

5 - 5-yr Pass veh (excl some trks/vans)
6 - 5-yr SUV/truck/van > 6,000 lbs
7 - 5-yr Truck, van, auto on trk chassis
9 - 5-yr Other Vehicle (listed

See IRS Publication 946, How to Depreciate Property, for additional information.