Question

Kyra purchased video recording equipment that she uses in her in-home business (asset class 57.0). The...

Kyra purchased video recording equipment that she uses in her in-home business (asset class 57.0). The equipment was placed in service on February 20, 2017. The equipment is used 40% for business. What restrictions does Kyra have?

ADS method must be used.  

Bonus depreciation is limited.  

GDS method must be used.  

§179 expenses deduction is limited.  
Business   Accounting   
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Answer #1

Asset is a listed prperty. SInce it is used less than fifty percent for business, no bonus or 179 deduction are allowed. It is required to use ADS method.

First option is correct.

Notes:

Listed property:

Some assets are used by taxpayers for personal uses and try to receive maximum depreciation benefit out of them. Listed property provision avoids such tax abuse. Listed property includes assets which can be used for personal uses and includes assets such as passenger automobiles, computers and peripherals, video recording equipment etc…

Qualified business use: if listed property is used fifty percent or less for a qualified business, section 179 election and bonus depreciation is not allowed and depreciation is allowed using the straight-line method over an alternative recovery period.

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