Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 12-24-2016, 03:54 AM
Junior Member
 
Join Date: Dec 2016
Posts: 6
Section 179 Deduction for Computer: "Listed Property" Question

I purchased a new desktop computer system for my small business, and since the computer is in my home (I don't have a separate office, and while I do have a room in my home devoted entirely to office/business use, I haven't been taking the home office deduction), I believe it qualifies as "Listed Property." I use the computer almost exclusively for business, but I do use it to watch the occasional movie (because the screen is much bigger than the one on my new laptop that I bought mainly for personal use and that I'm not deducting) and read/respond to occasional personal emails that come in while I'm working. I know that means I'm supposed to keep written records of my business vs personal computer usage, and I assume it's those written records that Form 4562 Part V Line 24a "Do you have evidence to support the business/investment use claimed?" and Line 24b "If 'Yes,' is the evidence written?" refers to?

What happens if I answer question 24a with "No"? Will my deduction not be allowed? If I answer "Yes," will I be expected to enclose written evidence with my tax return? If not, will the IRS contact me later to request my written computer usage records? About 90% of the time I use the computer for business, but I learned only recently that I was supposed to keep a written record of when that is, so I would have to go back and construct such a record from memory and document/email dates as best as I can. That would be a lot of work, not to mention enormously time-consuming.

I'd also like to hear from other sole proprietors who took a Section 179 deduction for a computer that qualified as Listed Property. Did you have written usage records if you did not use the computer entirely for business? Did the IRS ask to examine them? How detailed were they?

Any help would be much appreciated.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 12-24-2016, 04:05 PM
Moderator
 
Join Date: Oct 2010
Posts: 4,768
I purchased a new desktop computer system for my small business, and since the computer is in my home (I don't have a separate office, and while I do have a room in my home devoted entirely to office/business use, I haven't been taking the home office deduction), I believe it qualifies as "Listed Property." =====I guess it depends; as you can see, listed pty means; property that is used by employees or owners in a business which can also be used for personal purposes


I use the computer almost exclusively for business, but I do use it to watch the occasional movie (because the screen is much bigger than the one on my new laptop that I bought mainly for personal use and that I'm not deducting) and read/respond to occasional personal emails that come in while I'm working. I know that means I'm supposed to keep written records of my business vs personal computer usage, and I assume it's those written records that Form 4562 Part V Line 24a "Do you have evidence to support the business/investment use claimed?" ======>>yes thus is one of the examples of LISTED PTY;you need to check yes box.

and Line 24b "If 'Yes,' is the evidence written?" refers to?=====>>any document log or excel sheet used by you to report your listed pty or etc

What happens if I answer question 24a with "No"? Will my deduction not be allowed?=====>I guess so unless you have some reasonable cause to convine IRS on the reason why you do not have any evidence to support your listed pty. For this you need to contact the IRS it is beyond tax pro?s capability

If I answer "Yes," will I be expected to enclose written evidence with my tax return?=====>I donnot think so however you need to keep any written evidence to submit at any time if you are required to submit them.

If not, will the IRS contact me later to request my written computer usage records?==> Aslongas your return gets audited by the IRS then yes.


About 90% of the time I use the computer for business, but I learned only recently that I was supposed to keep a written record of when that is, so I would have to go back and construct such a record from memory and document/email dates as best as I can. That would be a lot of work, not to mention enormously time-consuming.=> it?d be excellent preparation for a possible IRS audit.

I'd also like to hear from other sole proprietors who took a Section 179 deduction for a computer that qualified as Listed Property. Did you have written usage records if you did not use the computer entirely for business? ======>Your business usage of listed property be more than 50% in order for you to claim an expensing election for the property; to claim "bonus" depreciation for the property, or to depreciate the property under the MACRS depreciation system. If you use the property less than 50 % for business, you can still claim depreciation based on your business use percentage, but you must use straight-line depreciation under the ADS method, using the appropriate ADS class lives for the items.


Did the IRS ask to examine them? How detailed were they?==========>>not that I know of however you just need plain record, doc , excel sheet or log or etc



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Rool-over from "traditional after-tax 401k" to "Roth IRA" golf2000 IRA/Sep 1 09-27-2014 03:33 AM
As part of the "Small Business Jobs Act of 2010 Tax Provisions, IRS allows increased expensing limitations for 2010 and 2011 for certain real property treated as Code section 179 property. TaxGuru General 0 01-31-2011 07:58 PM
What IRS code section clearly defines a "Statutory Worker"? TaxGuru General 0 01-10-2010 11:17 PM
Alabama State increases the "Standard Deduction" for 2008. TaxGuru Alabama 0 10-05-2008 10:50 AM
What are IRS "Section 179 Depreciation limits for 2007"? SusanB Depreciation 2 11-29-2007 03:17 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning