Can I deduct expenses for items purchased before business started but are used partially for business? If I need to depreciate these items, how do I do it?

[asyouwishenginee]

I began doing independent contracting this year, and use items I purchased (for personal use) before I began the business such as my laptop and cell phone.

Can I deduct these expenses? I have seen some references to needing to depreciate the item and only claim the percent of it used for business, but I don't know how to go about doing this and I can't seem to find any specific instructions on how to depreciate or where to put the business use percent of the depreciated value. I imagine there's an IRS form somewhere that would walk me through the calculations/regulations but I have been unable to find it. 

Thank you!

[Anonymous]

(a) Capitalization of expenditures

Except as otherwise provided in this section, no deduction shall be allowed for start-up expenditures.

(b) Election to deduct

(1) Allowance of deduction 

If a taxpayer elects the application of this subsection with respect to any start-up expenditures—

(A) the taxpayer shall be allowed a deduction for the taxable year in which the active trade or business begins in an amount equal to the lesser of—

(i) the amount of start-up expenditures with respect to the active trade or business, or

(ii) $5,000, reduced (but not below zero) by the amount by which such start-up expenditures exceed $50,000, and

(B) the remainder of such start-up expenditures shall be allowed as a deduction ratably over the 180-month period beginning with the month in which the active trade or business begins.

so what are start up expenses

(c) Definitions For purposes of this section—

(1) Start-up expenditures The term “start-up expenditure” means any amount—

(A)paid or incurred in connection with—

(i) investigating the creation or acquisition of an active trade or business, or

(ii) creating an active trade or business, or

(iii) any activity engaged in for profit and for the production of income before the day on which the active trade or business begins, in anticipation of such activity becoming an active trade or business, and

(B) which, if paid or incurred in connection with the operation of an existing active trade or business (in the same field as the trade or business referred to in subparagraph (A)), would be allowable as a deduction for the taxable year in which paid or incurred.

The term “start-up expenditure” does not include any amount with respect to which a deduction is allowable under section 163(a), 164, or 174.

so what does this all mean.  your laptop and cell phone don't seem to meet the definition of start up expenses.  however,  since they are being transferred from personal use to business use, the cost basis to use is the lower of what you paid or Fair Market Value at the time you put them to use in your business.    further if they are not used 100% in you business only the business % qualifies.  they would be depreciable starting in the year your business starts with a 5 year life.

in the year the business starts, assuming start up costs don't exceed $50,000 you can deduction up to $5,000 in costs the rest is amortized over 180 months starting with the month the business commenced