hogge@uiucdcsp.CS.UIUC.EDU (01/30/86)
Question: can a personal computer be written off as an educational expense? If so, what are the restrictions, if any, on the uses you put it to, the original reasons for purchasing it, etc. I have heard that the IRS is cracking down heavily on pc's written off as a *business* expense and that there are rigid use restrictions (such as the requirement to keep a log of every time you use the pc). I bought the PC for use in coursework and research while I get my Masters in Computer Science. However, the school does not require the purchase, and the school does provide adequate computing facilities (so I didn't absolutely need the PC). I'd appreciate any advise or pointers to good sources. --John
covey@uiucdcs.CS.UIUC.EDU (02/03/86)
Since I would like to buy a pc could any responses also be sent to the net or to me at the following e-mail addresses. Thanks for your help. Nancy Covey covey@uiuc.ARPA (via ARPAnet) covey@uiuc.csnet (via CSNET) ihnp4!uiucdcs!covey or pur-ee!uiucdcs!covey (via USENET)
claus@inuxd.UUCP (David Claus) (02/04/86)
> Question: can a personal computer be written off as an educational expense? Question: can a personal computer be written off as an investment expense? Question: can a personal computer be written off as an tax filing expense? > If so, what are the restrictions, if any, on the uses you put it to, > the original reasons for purchasing it, etc. I have heard that the IRS > is cracking down heavily on pc's written off as a *business* expense and > that there are rigid use restrictions (such as the requirement to keep > a log of every time you use the pc). > Dave Claus
miorelli@pwa-b.UUCP (Bob Miorelli) (02/05/86)
Unfortunately, the IRS has really clamped down on the writeoff
of computers used at home. There is a guideline that says that it
must be "required as a condition of employment" to qualify. Even
so, if the business use is below 50% of the total use an extended
depreciation must be used (12 yrs) and it doesn't qualify for the
investment credit nor the section 179 expense deduction. The IRS
frowns on the writeoff of home computers.
--
-->BoB Miorelli, Pratt & Whitney Aircraft
also, H & R Block tax perparer and Instructor
pwa-b!miorellirdr@inuxh.UUCP (Robert Rindfuss) (02/13/86)
There are a couple interesting quirks to the computer writeoff rules: 1. If the "qualified business use" (this means use in a trade of business, not just managing your investments) is over 50%, then the computer can be written off in the normal way, meaning you can take the sec. 179 deduction and the investment tax credit, and depreciate your cost basis (adjusted for the sec. 179 and ITC) over 5 years. The quirk is this - as long as the qualified business use is over 50%, you figure your cost basis on the business use percentage PLUS the investment use percentage. For example, if you used your PC 60% of the time for business, 30% of the time managing your stock portfolio, and 10% for personal, you would figure your sec 179, ITC, and depreciation based on 90% of the cost of the machine. If, instead, you used the machine 30% for business, 60% for your stocks, and 10% for personal, you could not take the sec 179 or ITC, but would depreciate 90% of the machine over 12 years (not 5 years). 2. The other quirk is that the computer is not considered "listed property" (and hence is not subject to these rules) if the computer is located "at your regular place of business." That's so companies like the Labs don't have to keep logs on all their machines or worry about employees using the machines for personal stuff. This also implies that if you work at home and maintain an area of your house "for the regular and exclusive use" of your business and you keep your computer there, then you don't have to keep the written log for the computer, and the machine would be fully deductable. The only difference here is really the log keeping, since if you went into your business room and started working on your stocks or playing Rogue, you'd blow the "exclusive use" status anyway. It does raise a question, though - what if I keep the machine in my "exclusive use" area and run a serial cable to a terminal somewhere else in my house for when I want to work on non-business? All this stuff came out of the IRS publications on Depreciation and Investment Tax Credit and is my interpretation of what it all means, no guarantees, though. Bob Rindfuss inuxh!rdr