Key Takeaways
- Listed property = assets prone to personal use (passenger autos).
- >50% business use = GDS + §179 + bonus allowed.
- ≤50% business use = ADS (straight-line) required.
- Section 280F luxury auto limits apply (<6,000 lbs).
- Tax Year 2024 auto limit: $12,400 base, $20,400 with bonus.
- Recapture if business use drops from >50% to ≤50%.
Last updated: January 2026
Listed Property Rules
Why This Matters for the Exam
Listed property rules prevent abuse of depreciation for personal-use assets. The exam tests the 50% rule and luxury auto limits.
Expect at least 3-4 questions on listed property.
What Is Listed Property?
| Category | Examples |
|---|---|
| Passenger automobiles | Cars, light trucks (<6,000 lbs) |
| Transportation property | Boats, aircraft for personal use |
| Note | Computers removed from listed property (TCJA) |
The 50% Business Use Test
| Business Use | Depreciation Allowed |
|---|---|
| >50% | GDS (accelerated), §179, bonus |
| ≤50% | ADS (straight-line) only, no §179/bonus |
Luxury Auto Limits (§280F) - Tax Year 2024
| Year | Base Limit | With Bonus (+$8,000) |
|---|---|---|
| Year 1 | $12,400 | $20,400 |
| Year 2 | $19,800 | N/A |
| Year 3 | $11,900 | N/A |
| Year 4+ | $7,160 | N/A |
Heavy SUV Exception
| Vehicle | Rule |
|---|---|
| GVWR >6,000 lbs | NOT subject to §280F limits |
| §179 cap | $30,500 (Tax Year 2024) |
| Bonus | 60% of remaining (Tax Year 2024) |
Depreciation Recapture
| Trigger | Effect |
|---|---|
| Business use drops to ≤50% | Recalculate using ADS |
| Excess depreciation | Recaptured as ordinary income |
| Going forward | Must use ADS |
Recapture Calculation
| Item | Amount |
|---|---|
| Depreciation taken (GDS + bonus) | $20,000 |
| Depreciation allowable (ADS) | $8,000 |
| Excess to recapture | $12,000 (ordinary income) |
Real-World Scenario (Tax Year 2024)
Scenario: Realtor buys $50,000 sedan, 70% business use.
- Eligible: >50% → GDS + bonus allowed.
- Potential deduction: $50,000 × 70% = $35,000.
- §280F limit: $20,400 (with bonus).
- Actual Year 1 deduction: $20,400 (capped).
On the Exam
Expect 3-4 questions on listed property, typically:
- 50% Rule Questions: "What method if 40% business use?"
- Limit Questions: "What is Year 1 auto limit with bonus?"
- Recapture Questions: "What if business use drops?"
The key is to remember: >50% = GDS + bonus. ≤50% = ADS only. Tax Year 2024 auto limit: $12,400 base, $20,400 with bonus. Heavy SUV (>6,000 lbs) not subject to limits.
Test Your Knowledge
Computer (40% business, 60% personal). Depreciation method?
A
B
C
D
Test Your Knowledge
Tax Year 2024 luxury auto limit, Year 1, with bonus?
A
B
C
D
Test Your Knowledge
Business use drops from 60% to 30% in Year 3. What happens?
A
B
C
D