Question

Which of the following properties are excepted property in regards to the special depreciation allowance? Property placed into service and disposed of in the next tax year. Property converted from personal use to business use in the same or later tax year. Property on which the taxpayer uses the Alternative Depreciation System. Listed property used 50% or less for business.

Answer 1

Excepted Property

Qualified property does not include any of the following:

• Property placed in service and disposed of in the same tax year.
• Property converted from business use to personal use in the same tax year acquired.
• Property converted from personal use to business use in the same or later tax year may be qualified property.
• Property required to be depreciated under the Alternative Depreciation System (ADS). This includes listed property used 50% or less in a qualified business use.
• Qualified restaurant property (as defined in section 168(e)(7) of the Internal Revenue Code) that is not qualified improvement property. Property for which you elected not to claim any special depreciation allowance (discussed later). Property for which you elected to accelerate certain credits in lieu of the special depreciation allowance (discussed next).

Therefore in the above question following are excepted property:

• Property converted from personal use to business use in the same or later tax year.
• Property on which the taxpayer uses the Alternative Depreciation System. Listed property used 50% or less for business.