Business assets used for free services for friends

Jan 22, 2011 2 Replies

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Lee Choquette 15 years ago

I operate a mobile DJ business, playing music at weddings and parties. Sometimes I do a free show for a friend. This is not really advertising, as I'm not expecting to get enough referrals to make it worth it; it's just helping a friend out.

I don't deduct mileage or other direct expenses for these free shows. However, I use equipment whose depreciation I deduct as though the equipment is used 100% in a business, since I don't use the equipment for anything personal: just paid shows and free shows.

Any problem claiming 100% business use despite using the equipment for free shows?

Thanks, Lee

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Bill Brown 15 years ago

Free shows for friends sound a lot like personal use to me.

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removeps-groups 15 years ago

You have to allocate between business and personal use. If you DJ 100 times a year and 2 are personal, then depreciation is 98% of the total. That is say if you used the asset 100% for business and the depreciation was $100, then because of personal use it is now $98.

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