Question

Which of the following is depreciable property? Equipment placed in service and disposed of in the same year. A lawnmower used to mow the taxpayer's yard. A truck used by the taxpayer for both personal and business purposes. An unimproved piece of land used as a parking lot.

Answer 1

Correct answer:- A truck used by the taxpayer for both personal and business purposes.

According to the Internal Revenue Service (IRS),property used for transportation purposes including trucks, buses, boats, airplanes, motorcycles, and any other vehicles used to transport persons or goods includes in list property.

Listed property is a specific class of depreciable property subject to a special set of tax rules if it is used predominantly for business purposes. To be considered listed property, an item must be used for more than 50% for a company's business. That means the remainder of the time, assets may be also be used for personal purposes.

If a listed property is used primarily for business reasons, then it is subject to the statutory percentage depreciation method, as it will be considered a business asset.