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Subject:  Re: Computer HW/SW Deduction Date:  3/25/2000  10:19 PM
Author:  RooCat Number:  32578 of 127753

1.Let's say I use the computer this year for 75% business/investment use. Which is it? Business or investment use or is it both? If it is both, you have to allocate the percentage between the 2 types of use and presumably neither will be 50%. Can you prove it? Do you keep a time log?

By my understanding of publication 946, I would have to continue to use MACRS, but recapture some of the deduction as income since I would no longer qualify for MACRS depreciation. You can use MACRS-ADS and not worry about it.

Do I really need to keep track of every little (<$100) expense for depreciation purposes or can I just expense them. My own rule of thumb is expense <$200-250. Others may or may not agree with me.

The software, however, is not listed property so could I use the rules for general asset accounts to lump software together as one depreciable item without having to list each separately. This seems reasonable, but also a headache since I would have to determine a combined business use percentage for all items lumped together. Date of purchase governs what you can lump together. If there is doubt about continued business useage, then keep track of it separately. Good accounting software (Peachtree) will do this for you.

TurboTax or other tax preparation software doesn't really have a useful life greater than a year so it
would seem to me that this can be classified as an expense (subject to the business use percentage, of course) and not depreciated.

Unless this pertains to doing your taxes for 1999, it would be appreciated if you left questions of this sort until after April 17th since we're kind of busy right now. :^)
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