small home business tax deductions
Computer deduction on new business.?
I bought a $3,500 computer in 2004 for personal use. In 2006 I started a business and converted it to 75% business use. When filing for my small home business taxes, can I deduct the value of my computer? I have never claimed it as an asset before, and have not ever depreciated it. What should I deduct and depreciate?
Using Turbo Tax, and it has confused me. Thanks.
You can not deduct the value of the computer. You would capitalize it and depreciate the business use portion. You would use its fair market value as its basis, not your cost. Since the computer is a couple of years old, it most likely has a lesser value than what you bought it for.
The basis for depreciation is the lesser of the following:
-The FMV of the property on the date of the change.
-Your adjusted basis on the date of the change.
Home Business Tax Deductions (100% Deductible Expenses)
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