Vehicles, photographic equipment, audio, and video equipment, and other types of property that are often used for both personal and business purposes, also referred to as listed property are subject to special recordkeeping requirements and restrictions on depreciation and expensing.
Listed property generally includes:
- Passenger automobiles weighing 6,000 pounds or less.
- Any other property used for transportation if the nature of the property lends itself to personal use, such as motorcycles, pick-up trucks, sport utility vehicles, etc.
- Any property used for entertainment or recreational purposes (such as photographic, phonographic, communication, and video recording equipment).
Listed property does not include:
- Photographic, phonographic, communication, or video equipment used exclusively in a taxpayer's trade or business or at the taxpayer's regular business establishment
- Any computer or peripheral equipment used exclusively at a regular business establishment and owned or leased by the person operating the establishment
- An ambulance, hearse, or vehicle used for transporting persons or property for compensation or hire; or
- Any truck or van placed in service after July 6, 2003, that is a qualified nonpersonal use vehicle.
For purposes of the exceptions above, a portion of the taxpayer's home is treated as a regular business establishment only if that portion meets the requirements for deducting expenses attributable to the business use of a home. However, for any property listed above, the regular
business establishment of an employee is his or her employer's regular business establishment.
Taxpayers cannot take any depreciation or section 179 deduction for the use of listed property unless they can prove their business/investment use with adequate records or with sufficient evidence to support their own statements. For listed property, records must be kept for as long as any recapture can still occur. Recapture can occur in any tax year of the recovery period.
To meet the adequate records requirement, a taxpayer must maintain an account book, diary, log, statement of expense, trip sheet, or similar record or other documentary evidence that, together with the receipt, is sufficient to establish each element of an expenditure or use. Taxpayers do not have to record information in an account book, diary, or similar record if the information is already shown on the receipt. However, their records should back up their receipts in an orderly manner.
Desktop - How to Mark an Asset as Listed Property
ProWeb - How to Mark an Asset as Listed Property