15.5 Listed Property Rules
Key Takeaways
- Listed property = assets prone to personal use (passenger autos, transportation property).
- >50% business use = GDS + §179 + bonus allowed.
- ≤50% business use = ADS (straight-line) required; no §179 or bonus.
- Section 280F luxury auto limits apply to passenger autos (<6,000 lbs GVWR).
- Tax Year 2025 auto Year 1 cap: $12,400 base / $20,400 with bonus. Year 2: $19,800. Year 3: $11,900. Year 4+: $7,160.
- Heavy SUV (GVWR >6,000 lbs) not subject to §280F caps; §179 SUV cap is $31,300 (2025).
- Recapture if business use drops from >50% to ≤50%.
Why This Matters for the Exam
Listed property rules prevent abuse of depreciation for personal-use assets. The exam tests the 50% rule and the §280F luxury auto limits, which are updated each year by IRS Revenue Procedure.
Expect at least 3-4 questions on listed property.
What Is Listed Property?
| Category | Examples |
|---|---|
| Passenger automobiles | Cars, light trucks (<6,000 lbs GVWR) |
| Transportation property | Boats, aircraft for personal use |
| Note | Computers were removed from listed property by TCJA — they are no longer listed property |
The 50% Business Use Test
| Business Use | Depreciation Allowed |
|---|---|
| >50% | GDS (accelerated), §179, bonus |
| ≤50% | ADS (straight-line) only — NO §179, NO bonus |
Luxury Auto §280F Limits — Tax Year 2025
| Year | First-Year Cap |
|---|---|
| Year 1 with bonus | $20,400 |
| Year 1 without bonus | $12,400 |
| Year 2 | $19,800 |
| Year 3 | $11,900 |
| Year 4+ | $7,160 |
With OBBBA restoring 100% bonus depreciation, the practical Year 1 maximum for a passenger auto placed in service after January 19, 2025 is $20,400 (before pro-ration for business-use percentage).
Heavy SUV / Truck Exception
| Vehicle | Rule |
|---|---|
| GVWR >6,000 lbs | NOT subject to §280F caps |
| §179 SUV cap (GVWR 6,000–14,000 lbs) | $31,300 (2025) |
| GVWR >14,000 lbs or qualified nonpersonal-use vehicle | No §179 cap |
| Bonus on heavy SUV | 100% (post-Jan 19, 2025) or 40% (pre-/election) |
Depreciation Recapture
| Trigger | Effect |
|---|---|
| Business use drops to ≤50% | Recalculate using ADS |
| Excess depreciation (GDS vs. ADS) | 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 2025)
Scenario: Realtor buys $50,000 sedan in May 2025, 70% business use.
- Eligible: >50% business use → GDS + bonus allowed.
- §280F Year 1 cap with bonus (2025): $20,400.
- Apply business-use percentage: $20,400 × 70% = $14,280 Year 1 deduction.
On the Exam
Expect 3-4 questions on listed property, typically:
- 50% Rule Questions: "What depreciation method if 40% business use?"
- Limit Questions: "What is the 2025 Year 1 auto limit with bonus?"
- Recapture Questions: "What if business use drops below 50%?"
The key is to remember: >50% = GDS + §179 + bonus. ≤50% = ADS only. 2025 auto Year 1 cap: $12,400 base / $20,400 with bonus. Heavy SUV (>6,000 lbs GVWR) not subject to §280F; §179 SUV cap = $31,300.
Computer (40% business, 60% personal). Depreciation method?
Tax Year 2025 luxury auto §280F first-year cap WITH bonus depreciation (100% business use)?
Business use drops from 60% to 30% in Year 3. What happens?