The Internal Revenue Code classifies certain depreciable property as “listed property.” Listed property consists of items that Congress felt required special rules, because they are the type of property that could generate legitimate business expenses, but which is frequently really used more for personal than business reasons. The term includes passenger automobiles; other forms of transportation likely to be put to personal use such as boats or airplanes; entertainment recreational and amusement property; and computers and peripheral equipment.
The first restriction on listed property is that the taxpayer can only claim accelerated depreciation on the equipment, if it is used more than 50% for business. Thus if a bankruptcy lawyer puts 10% of the mileage on her car driving to court, but the rest of her use of the vehicle is personal, she cannot use the accelerated rate of depreciation that is normally available on automobiles. Instead she can only use the straight line method of depreciation for the 10% of the car she is allowed to depreciate, and she must use a longer depreciable life.
The other restriction on listed property consists of stricter record keeping requirements in order to qualify for the tax deductions. On listed property taxpayers are required to record when and where the property was used for business and the business purpose involved in each use.
No comments:
Post a Comment