To figure the deduction for any "listed property" on your IRS taxes, divide the property into segments according to use, i.e., business portion, investment portion, personal portion. Then determine what kind of use is “predominant” (i.e., over 50% of the total). If the “qualified business use” is over 50%, figure the deduction using MACRS (accelerated) or bonus depreciation or Section 179 (if elected in the year placed in service). The predominant-use test must be met each year during the recovery period. If that test is not met, the taxpayer must change to the straight-line method and possibly a longer recovery life. Use the alternative depreciation method (ADS) and the lives assigned under it. In the year the property changes to straight-line, excess depreciation and any Section 179 previously deducted must be recaptured. The recapture amount is the excess depreciation and 179 expense deducted in previous years over the depreciation which would have been allowed under the straight-line method.

Listed property that is used 50% or less for business, does not qualify for bonus depreciation. If the business use exceeds 50% and the property qualifies for bonus depreciation in the year the listed property is placed into service, and in a subsequent year use of the listed property falls to 50% or less, bonus depreciation, as well as any amount deducted under Sec. 179 for that property, must be recaptured under the listed property recapture rules, as explained above.