Adjusted Basis of Listed Property
When listed property is partly used for personal purposes, for determining future depreciation, the basis of the asset must be reduced as though 100% of the depreciation allowable had been claimed. Basis for computing gain or loss will be the actual adjusted basis.
“ Example – Unrecovered Basis of Listed Property: Dan purchased listed property (not an automobile) for use in his business in 2016 for $3,000. In 2016 and the next five years, his qualified business use ranged from 55% to 80%. In total, he deducted $2,144 of depreciation over the recovery period. At the end of that time, his actual adjusted basis was $856 ($3,000 - $2,144). In 2022, Dan uses the property 100% for business, but since his remaining basis for depreciation is zero, he can’t claim a depreciation deduction. His depreciable basis is zero because he has to include the personal portion of each year’s depreciation amount when figuring his adjusted basis for computing future depreciation – thus, the full amount of the original cost is deemed depreciated. If Dan were to sell the property after 2021, his basis for figuring gain or loss would be $856. ”
- Unrecovered Basis of Listed Property: