Table of Contents
- What Is Listed Property?
- Key Takeaways
- Understanding Listed Property
- Examples of Listed Property
- How to Write Off Listed Property
- Depreciation
- Defining Listed Property Business Use
- Allocating Use of Listed Property
- Can Employees Deduct Listed Property?
- What Is Mixed-Use Property?
- Can I Deduct Commuting Mileage?
- What Are the Record-Keeping Requirements for Listed Property?
- What Is Recaptured Depreciation?
- The Bottom Line
What Is Listed Property?
Let me explain listed property directly: it's tangible property you can use for both business and personal reasons. The IRS defines it as passenger automobiles, other transportation property, and items generally used for entertainment, recreation, or amusement. If you use this property more than 50% for business, it qualifies for special tax deductions and depreciation rules.
Key Takeaways
You should know that listed property is a tangible asset defined by the IRS for both business and personal use. It includes vehicles and entertainment devices. When used over 50% for business, it gets favorable tax treatment like Section 179 deductions. Even if under 50%, you can depreciate the business portion.
Understanding Listed Property
Listed property is a tangible asset your business owns that serves both business and personal purposes. If you use it more than 50% for business—measured by time, mileage, or another relevant factor—it qualifies for special deductions or depreciation. These rules exist to stop people from claiming deductions on personal items disguised as business use. You must keep adequate records, including purchase price, repair costs, and proof of business use.
Examples of Listed Property
The IRS lists examples in Publication 946, such as passenger automobiles—four-wheeled vehicles for public roads rated at 6,000 pounds or less unloaded gross vehicle weight. Other transportation property qualifies too, except qualified nonpersonal use vehicles like police cars or ambulances. Property for entertainment, recreation, or amusement includes photographic, phonographic, communication, and video equipment. Cell phones were once listed but changed in 2010; you can still deduct business use without the strict records.
How to Write Off Listed Property
When filing taxes, you can write off tangible property costs through deductions or depreciation methods. For listed property over 50% business use, Section 179 lets you deduct all or most of the cost in the year it's placed in service, often the purchase year. Limits apply: $1.16 million for 2023, $1.22 million for 2024, with specifics like $28,900 for SUVs in 2023. It can't exceed your taxable income, and you prorate by business use percentage. Use Form 4562 to claim it.
Depreciation
You can depreciate listed property over time. Over 50% business use qualifies for the general depreciation system, allowing faster write-offs early on. At 50% or less, use the alternative system for even deductions over longer periods. High business use may also get bonus depreciation for qualified property bought after September 27, 2017, and before January 1, 2023, starting at 100% in 2022 and phasing out by 2027. Lower use makes it ineligible.
Defining Listed Property Business Use
To claim Section 179, your property must be used more than 50% for qualified business. If not, it doesn't qualify, and you use straight-line MACRS. Leased property has an exception if you're regularly in the leasing business—frequent, continuous contracts, not occasional ones. For example, one car lease doesn't count, but managing a fleet might. Employer charges for personal use don't qualify as leasing.
Allocating Use of Listed Property
Divide use by purposes to check the requirement. For vehicles, use mileage: business miles over total miles. For other items, use actual time used, not availability—business hours over total hours. Only count deductible activities as business. Commuting doesn't count, even with work during it. Others' use isn't business unless connected to yours, reported as income, or rented fairly. Employee use counts only if job-required and for employer convenience.
Can Employees Deduct Listed Property?
Employees can deduct depreciation for listed property used in their job only if it's business use, for the employer's convenience, and required for employment.
What Is Mixed-Use Property?
Mixed-use property sometimes means the same as listed property, but it's more common in real estate for buildings with commercial and residential parts.
Can I Deduct Commuting Mileage?
No, you can't deduct commuting from home to work; only non-commuting business trips count.
What Are the Record-Keeping Requirements for Listed Property?
You need detailed records like mileage logs or usage logs, including date, purpose, and business amount to prove use.
What Is Recaptured Depreciation?
Recapture lets the IRS reclaim some deductions if you sell an asset for more than its basis or, for listed property with Section 179, if business use drops to 50% or less during the recovery period—like five years for cars.
The Bottom Line
Understand IRS listed property rules, track business versus personal use, and keep records to maximize deductions and benefits from your assets.
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