I purchased about 5k of Home Office Furniture that I use in the Office that I work out of, but the purchase was made in 2007. How do I write it off ? Below is a list of the items:
BookCases - I have 2 of these Desk Chair Rug Paintings - 2
Also, I have a wall mounted TV, can that be written off as well (I watch a little TV while I work)?
I wrote off the computer equipment that I bought, but I was not sure if I could write this off.
Thanks
"Gary" wrote
The "expensing" of equipment is accomplished through depreciation (Form
4562) over a number of years. For new assets acquired in 2008 you can take 50% "bonus" depreciation on the cost in addition to the regular depreciation on the remaining balance. It's possible to take Section 179 and deduct the full amount, subject to limitations, the one that catches folks most often is having sufficient profits.Equipment, furniture, etc you bought in a prior year may not be eligible for Section 179, although you can take regular depreciation, etc. on that equipment.
If this is for your business, then the deductible amount flows from the 4562 to your Schedule C.
However, Paul, we do not know whether or not the OP is self employed with a schedule c , or an employee, since he only said "in the Office that I work out of".
No matter which category, the painting and television might not pass the ordinary and necessary tests.
ChEAr$, Harlan Lunsford, EA n LA
See publication 946.
You might have to also write off the depreciation on the portion of the home you use for business. Be aware that when you dispose of any depreciated property, you have to recapture the depreciation. If you buy an item for $500, depreciate it over 7 years, and sell it afterwards for $50, you have gain of $50! Be aware of this when you depreciate your house.
You can watch TV on your computer too. I'm skeptical that the TV can be written off. Technically, it can only be written off only if it is
100% for business.
That seems fine, if it's used 100% for business. If you use it 40% for business, you get to depreciate only 40% of it. Special rules apply with the bonus and section 179 depreciation, most notably that the business use must be more than 50%.
Was this stuff used in your office in 2007? If so, what did you do with the cost of the stuff on your 2007 tax return?
Or, maybe, was it non-business use for 2007, and you're placing the stuff into business use for the first time, now, in 2008?
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