@hs101 wrote:
This is very insightful and I appreciate the detailed reply. I did not start active and ongoing business activities until 2024. So in my case, I can simply deduct the full 800 dollars (assuming 80 percent use) of the laptop on my 2024 tax return? So there's no extra steps and this expense wont belong in a different category of deductions for the 2024 tax return since it was technically bought last year?
You "place the asset in service" as of the date you first start using it for business, whenever that is.
Your basis for depreciation is a bit more complicated. If you convert property from personal use to business use, your basis is the fair market value at the time (in this case, what a 2 month old used computer would sell for). However, if the property was always intended for business use and was held for business use until you started the business, you can use the purchase price. (Or in your case, 80% of the purchase price.)
