Listed property refers to certain assets that are used for personal use in a business. For example, an automobile, cell phone, computer, etc. These properties are used in business, while they can also be used for personal business.
Under Section 280F of Internal Revenue Code (26 USCS ยง 280F(d)(4)), listed property is limited to properties of transportation, properties of entertainment, or other property specified by regulations.
If business-related use of a listed property is more than 50% in a tax year, the property can be treated the same as any other business asset. But if business-related use is less than 50%, the asset is not considered predominantly used in a business, and the ADS straight-line depreciation should be used to count the deduction. This is called the predominant-use test.
Because a listed property needs to pass the predominant use test to decide if it can be treated as other business assets, the user needs to maintain detailed records of the use of the listed property. Such as the mileage of a vehicle used for the business. The record should also include the expenditure related to the asset, such as cost of the property, repairs, insurance, and others.
[Last updated in July of 2020 by the Wex Definitions Team]