A) Yes you are allowed to take previously purchased items and convert them to business use.
B)The value is the LOWER of fair market value or what you paid plus improvements.
C) yes, move the items to their proper category. These items are not a write-off. I believe you could argue them as start-up expenses or simply depreciate them as a group.
Here is what happens both ways:
- Companies put all expenses prior to starting up into one lump, start up expenses. Those expenses are depreciated over 10 years. Currently, you can write off the first $5,000 for your first year in business.
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- Go to assets and depreciation, enter instruments as a lump, enter the information using the lower of value from above. You will mark converted from personal use. You can write off all or part or let it depreciate over 7 years - for musical instruments.
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