Mixed-Use Electronics Depreciation | Listed Property & the 50% Rule

The Rule Changed in 2018 — Most Guides Online Are Outdated

Before 2018, computers and peripheral equipment were "listed property" under IRC Section 280F(d)(4), which meant strict substantiation requirements (contemporaneous usage logs) and reduced deductions if business use dropped to 50% or less. The Tax Cuts and Jobs Act (TCJA) removed computers and peripheral equipment from that definition for property placed in service after December 31, 2017. A lot of content still online has not been updated to reflect this.

What Actually Still Applies

Removing computers from listed property did not remove the underlying business-use test — it only removed the stricter recordkeeping burden. Two separate rules remain relevant:

1. The 50% business-use test (still applies): If a computer, tablet, or phone is used 50% or less for business, you cannot take Section 179 on it, and bonus/MACRS depreciation is limited to straight-line over the ADS recovery period rather than the accelerated GDS method.
2. The listed-property substantiation rule (no longer applies to computers): You no longer need a detailed, contemporaneous log proving business-use percentage the way you would for a vehicle. Ordinary business records are enough.

Practical Qualification Flow

1. Estimate the device's business-use percentage honestly, based on actual usage patterns.
2. If business use is over 50%: the business-use portion of the cost is eligible for Section 179 and/or bonus depreciation in the year placed in service.
3. If business use is 50% or less: Section 179 is unavailable for this asset; depreciate the business-use portion using the straight-line method over the applicable ADS recovery period instead.
4. Keep basic records showing what the device is used for (e.g., invoices, a short usage description) — you don't need a mileage-log-style diary.