Business Furniture and Equipment — 2025 Publ 587 (PDF)

This section discusses the depreciation and section 179 deductions you may be entitled to take for furniture and equipment you use in your home for business. These deductions are available whether or not you qualify to deduct expenses for the business use of your home.

This section explains the different rules for each of the following.

Listed property.
Property bought for business use.
Personal property converted to business use.

Listed Property

If you use certain types of property, called listed property, in your home, special rules apply. Listed property includes any property of a type generally used for entertainment, recreation, and amusement (including photographic, phonographic, and video recording equipment).

More-than-50%-use test. If you bought listed property and placed it in service during the year, you must use it more than 50% for business to claim a section 179 deduction or an accelerated depreciation deduction.

If your business use of listed property is 50% or less, you cannot take a section 179 deduction and you must depreciate the property using the Alternative Depreciation

System (ADS) (straight line method). For more information on ADS, see Pub. 946.

Listed property meets the more-than-50%-use test for any year if its qualified business use is more than 50% of its total use. You must allocate the use of any item of listed property used for more than one purpose during the year among its various uses. You cannot use the percentage of investment use as part of the percentage of qualified business use to meet the more-than-50%-use test. However, you do use the combined total of business and investment use to figure your depreciation deduction for the property.

Years following the year placed in service. If, in a year after you place an item of listed property in service, you fail to meet the more-than-50%-use test for that item of property, you may be required to do the following.

Figure depreciation, beginning with the year you no longer use the property more than 50% for business, using the straight line method (ADS).
Figure any excess depreciation (include any section 179 deduction on the property in figuring excess depreciation) and add it to:

a. Your gross income, and

b. The adjusted basis of your property.

For more information, see Pub. 946.

Reporting and recordkeeping requirements. If you use listed property in your business, you must file Form 4562 to claim a depreciation or section 179 deduction. Begin with Part V, Section A, of that form.

You cannot take any depreciation or section 179 deduction for the use of listed property unless you

statements.

To meet the adequate records requirement, you must maintain an account book, diary, log, statement of expense, trip sheet, or similar record or other documentary evidence that is sufficient to establish business/investment use. For more information on what records to keep, see Pub. 946.

Property Bought for Business Use

If you bought certain property during 2025 to use in your business, you can do any one of the following (subject to the limits discussed later).

Elect a section 179 deduction for the full cost of the property.
Depreciate the cost of the property.
Take part of the cost as a section 179 deduction and depreciate the balance.

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Section 179 Deduction

You can claim the section 179 deduction for the cost of depreciable tangible personal property bought for use in your trade or business. You can choose how much (subject to the limit) of the cost you want to deduct under section 179 and how much you want to depreciate. You can spread the section 179 deduction over several items of property in any way you choose as long as the total does not exceed the maximum allowable. You cannot take a section 179 deduction for the basis of the business part of your home.

You elect the section 179 deduction by completing Part I of Form 4562.

More information. For more information on the section 179 deduction, qualifying property, the dollar limit, and the business income limit, see Pub. 946 and the Instructions for Form 4562.

Depreciation

Use Parts II and III of Form 4562 to claim your deduction for depreciation on property placed in service during the year. Do not include any costs deducted in Part I (section 179 deduction).

Most business property normally used in a home office is either 5-year or 7-year property under MACRS.

5-year property includes computers and peripheral equipment, typewriters, calculators, adding machines, and copiers.
7-year property includes office furniture and fixtures such as desks, files, and safes.

Under MACRS, you generally use the half-year convention, which allows you to deduct a half-year of depreciation in the first year you use the property in your business. If you place more than 40% of your depreciable property in service during the last 3 months of your tax year, you must use the mid-quarter convention instead of the half-year convention.

After you have determined the cost of the depreciable property (minus any section 179 deduction and special depreciation allowance taken on the property) and whether it is 5-year or 7-year property, use the table, shown next, to figure your depreciation if the half-year convention applies.

Table 4.

Recovery Year 5-Year Property 7-Year Property

1 20.00% 14.29% 2 32.00% 24.49% 3 19.20% 17.49% 4 11.52% 12.49% 5 11.52% 8.93% 6 5.76% 8.92% 7 8.93% 8 4.46%

See Pub. 946 for a discussion of the mid-quarter convention and for complete MACRS percentage tables.

Example. In June 2025, Kerry bought a desk and three chairs for office use. The total bill for the furniture was $1,975. The taxable business income for the year was $3,000 without any deduction for the office furniture. Kerry can elect to do one of the following.

Take a section 179 deduction for the full cost of the office furniture.
Take part of the cost of the furniture as a section 179 deduction and depreciate the balance.
Not take the section 179 deduction and depreciate the office furniture using its full cost.

The furniture is 7-year property under MACRS. Kerry does not take a section 179 deduction. Kerry multiplies $1,975 by 14.29% (0.1429) to get the MACRS depreciation deduction of $282.23.

Personal Property Converted to Business Use

If you use property in your home office that was used previously for personal purposes, you cannot take a section 179 deduction for the property.

If you began using the property for personal purposes after 1980 and before 1987 and change it to business use in 2025, you cannot take a special depreciation allowance for the property. However, you can depreciate it. You generally depreciate the property under the accelerated cost recovery system (ACRS). However, if the depreciation under ACRS is greater in the first year than the depreciation under MACRS, you must depreciate it under MACRS. For information on ACRS, see Pub. 534, Depreciating Property Placed in Service Before 1987.

If you began using the property for personal purposes after 1986 and change it to business use in 2025, you may be able to take a special depreciation allowance for the property. You generally depreciate the property under MACRS. The basis for depreciation of property changed from personal to business use is the lesser of the following.

The adjusted basis of the property on the date of change.

MACRS Percentage Table for 5- and 7-Year Property Using Half-Year Convention

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The fair market value of the property on the date of change.

If you began using the property for personal purposes before 1981 and change it to business use in 2025, depreciate the property by the straight line or declining balance method based on salvage value and useful life.