It depends on your decision about which way you choose to depreciate your computer. If you know you will have income in the future and want to have some deduction later you can use the 5 year depreciation (known as the recovery period). If you wish to be taxed as low as possible in the current year, then you would want to utilize all of the expense you are entitled to the year an asset is placed in service. The first year provides all the choices.
IRS Publication 946 explains all the depreciation methods and allowable recovery periods based on the type of property. Here is something to keep in mind and I hope it helps. Your computer would be considered personal tangible property.
- Real Property (anything that is land, buildings and structural components)
- Personal Property - Everything else - two types
- Tangible - anything you can see, feel or touch
- Intangible - in and of itself it has no value but represents a value (a dollar bill or a stock certificate, etc)
Please update with any questions you might have. We would need to know how you choose to deduct the expense (Section 179, Bonus or regular depreciation).
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