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Publication 946

Chapter 5
Additional Rules for Listed Property(p56)


This chapter discusses the deduction limits and other special rules that apply to certain listed property. Listed property includes cars and other property used for transportation, property used for entertainment, and certain computers.
Deductions for listed property (other than certain leased property) are subject to the following special rules and limits.
This chapter defines listed property and explains the special rules and depreciation deduction limits that apply, including the special inclusion amount rule for leased property. It also discusses the recordkeeping rules for listed property and explains how to report information about the property on your tax return.


Useful items

You may want to see:

 463  Travel, Entertainment, Gift, and Car Expenses
 535 Business Expenses
 587  Business Use of Your Home (Including Use by Daycare Providers)
Form (and Instructions)
 2106 : Employee Business Expenses
 2106-EZ : Unreimbursed Employee Business Expenses
 4562 : Depreciation and Amortization
 4797 : Sales of Business Property
See chapter 6 for information about getting publications and forms.

What Is Listed Property?(p56)


Words you may need to know (see Glossary)

Listed property is any of the following.

Improvements to listed property.(p56)

An improvement made to listed property that must be capitalized is treated as a new item of depreciable property. The recovery period and method of depreciation that apply to the listed property as a whole also apply to the improvement. For example, if you must depreciate the listed property using the straight line method, you also must depreciate the improvement using the straight line method.

Passenger Automobiles(p56)

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 at the time of purchase or usually included in the purchase price of an automobile.
The following vehicles are not considered passenger automobiles for these purposes.

Qualified nonpersonal use vehicles.(p57)

Qualified nonpersonal use vehicles are vehicles that by their nature are not likely to be used more than a minimal amount for personal purposes. They include the trucks and vans listed as excepted vehicles under Other Property Used for Transportation, next. They also include trucks and vans that have been specially modified so that they are not likely to be used more than a minimal amount for personal purposes, such as by installation of permanent shelving and painting the vehicle to display advertising or the company's name.
For a detailed discussion of passenger automobiles, including leased passenger automobiles, see
Publication 463.

Other Property Used
for Transportation(p57)

Although vehicles used to transport persons or property for pay or hire and vehicles rated at more than the 6,000-pound threshold are not passenger automobiles, they are still "other property used for transportation" and are subject to the special rules for listed property.
Other property used for transportation includes trucks, buses, boats, airplanes, motorcycles, and any other vehicles used to transport persons or goods.

Excepted vehicles.(p57)

Other property used for transportation does not include the following qualified nonpersonal use vehicles (defined earlier under Passenger Automobiles).
Clearly marked police and fire vehicle.(p57)
A clearly marked police or fire vehicle is a vehicle that meets all the following requirements.
Qualified moving van.(p57)
A qualified moving van is any truck or van used by a professional moving company for moving household or business goods if the following requirements are met.
Qualified specialized utility repair truck.(p57)
A truck is a qualified specialized utility repair truck if it is not a van or pickup truck and all the following apply.

Computers and Related
Peripheral Equipment(p58)

A computer is a programmable, electronically activated device capable of accepting information, applying prescribed processes to the information, and supplying the results of those processes with or without human intervention. It consists of a central processing unit with extensive storage, logic, arithmetic, and control capabilities.
Related peripheral equipment is any auxiliary machine which is designed to be controlled by the central processing unit of a computer.
The following are neither computers nor related peripheral equipment.