Publication 225 |
2000 Tax Year |
Listed Property
Listed property includes property used for transportation or
entertainment and certain computers and cellular phones. There are
additional recordkeeping requirements and rules you must follow when
depreciating listed property.
Listed Property Defined
Listed property is any of the following.
- Any passenger automobile (defined later).
- Any other vehicle used for transportation.
- Any property of a type generally used for entertainment,
recreation, or amusement.
- Any computer and related peripheral equipment unless
it is used only at a regular business establishment and owned or
leased by the person operating the establishment.
- Any cellular telephone (or similar telecommunication
equipment).
Other vehicles used for transportation.
This includes trucks, buses, boats, airplanes, motorcycles, and
other vehicles used for transporting persons or goods.
Vehicles that are not listed property.
The following vehicles, because of their design, are unlikely to be
used very often for personal purposes. They are not listed
property.
- Tractors and other special purpose farm vehicles.
- Bucket trucks (cherry pickers), dump trucks, flatbed trucks,
and refrigerated trucks.
- Combines, cranes and derricks, and forklifts.
- Passenger buses with a capacity of at least 20 passengers
that are used as passenger buses.
Predominant Use Test
If you do not use listed property predominantly (more than 50%) in
a qualified business use, you cannot take a section 179 deduction for
the property and you must depreciate the property using ADS (straight
line method) over the ADS recovery period.
Listed property meets the predominant use test for any year if its
business use is more than 50% of its total use. You must allocate the
use of any item of listed property used for more than one purpose
during the year among its various uses. You cannot use the percentage
of investment use of listed property as part of the percentage of
qualified business use to meet the predominant use test. However, you
do use the combined total of business and investment use to figure
your depreciation deduction for the property.
Property does not stop being predominantly used in a qualified
business use because of a transfer at death.
Special Rules for Passenger Automobiles
For passenger automobiles, the total depreciation deduction
(including the section 179 deduction) you can claim is limited.
Passenger automobile defined.
A passenger automobile is any four-wheeled vehicle made primarily
for use on public streets, roads, and highways and rated at 6,000
pounds or less of unloaded gross vehicle weight (6,000 pounds or less
of gross vehicle weight for trucks and vans). It includes any part,
component, or other item physically attached to the automobile or
usually included in the purchase price of an automobile.
Maximum deductions for 2000.
Determine the maximum depreciation deduction (including section
179) you can claim for a passenger automobile based on the date you
place it in service. The maximum deductions for 2000, based on the
year the automobile is placed in service, are shown in the following
table.
Maximum Depreciation Deduction
for Passenger Automobiles
Year Placed
In Service |
1st
Year |
2nd
Year |
3rd
Year |
4th Year and
Later |
2000 |
$3,060 |
$4,900 |
$2,950 |
$1,775 |
1999 |
5,000 |
2,950 |
1,775 |
1998 |
2,950 |
1,775 |
1997 |
1,775 |
1996 |
1,775 |
1995 |
1,775 |
1994 |
1,675 |
You must reduce these limits further if your business/investment
use is less than 100%.
Exceptions for clean-fuel vehicles.
There are two exceptions to the depreciation limits for passenger
automobiles. These exceptions are effective after August 5, 1997, for
automobiles that run on clean fuel.
The first exception is a higher depreciation deduction
for clean-fuel vehicles. The maximum deductions for 2000, based on the
year the clean-fuel vehicle is placed in service, are shown in the
following table.
Maximum Depreciation Deduction
for Clean-Fuel Vehicles
Year Placed
in Service |
1st
Year |
2nd
Year |
3rd
Year |
4th Year and
Later |
2000 |
$9,280 |
$14,800 |
$8,850 |
$5,325 |
1999 |
14,900 |
8,950 |
5,325 |
1998 |
8,950 |
5,425 |
1997 |
5,425 |
The second exception is for any costs you pay to
retrofit parts and components to modify an automobile to run on clean
fuel. These costs are not subject to the limits on
depreciation for automobiles. Only the cost of the automobile,
excluding this modification, is subject to the limit.
For more information on clean-fuel vehicles, see chapter 12 in
Publication 535,
Business Expenses.
Fully depreciated automobile.
If you have fully depreciated a car you are still using in your
business, you can continue to claim your other operating expenses for
the business use of your car. Continue to keep records, as explained
next.
More information.
For more information about deducting expenses for the business use
of your passenger automobile, see chapter 4 in Publication 463.
What Records Must Be Kept
You cannot take any depreciation or section 179 deduction for the
use of listed property (including passenger automobiles) unless you
can prove business and investment use with adequate records or
sufficient evidence to support your own statements.
Adequate records.
To meet the adequate records requirement, you 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. You
do not have to record information in an account book, diary, or
similar record if the information is already shown on the receipt.
However, your records should back up your receipts in an orderly
manner.
How long to keep records.
For listed property, you must keep records for as long as any
excess depreciation can be recaptured (included in income). Recapture
can occur in any tax year of the recovery period.
For more information on records, see chapter 4 in Publication 946.
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