AliciaP1
Expert Alumni

Business & farm

Only assets used for business are depreciated for tax purposes, so the fact that your computers were held for personal use means they have not been previously depreciated.  The IRS has 2 allowable methods for determining the recovery period as Carl posted.  You can see Table B-1 of IRS Publication 946 How to Depreciate Property for the complete list of recovery periods by specific type of asset.  In your case, your computer equipment would have a 5-year recovery life for either depreciation method.  Typically, most small business owners use the GDS(MACRS) system for depreciation and that is why TurboTax defaults to it.

 

The value should be determined based on the lower of cost or market value.  You can determine Fair Market Value (FMV) by evaluating the price of buying a like asset in the open market (your example of secondhand condition on eBay or Amazon is right).  So, in your example, you would input the computer equipment at FMV with a 5 year recovery period or life.

 

@ndc24075

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