What is listed property?

The short answer, and what it depends on

Publication 946 opens chapter 5 by naming the categories. Listed property is any of the following: passenger automobiles; business aircraft; any other property used for transportation, unless it is an excepted vehicle; and property generally used for entertainment, recreation or amusement, which the publication says includes photographic, phonographic, communication and video recording equipment. The label matters because every item in these groups carries extra conditions that ordinary equipment does not. The same truck can be an ordinary asset in one business and listed property in another depending on what it is and how it is used.

What the chapter calls each type

A passenger automobile is a four-wheeled vehicle made primarily for use on public streets, roads and highways and rated at 6,000 pounds or less of unloaded gross vehicle weight, or 6,000 pounds or less of gross vehicle weight for trucks and vans. Ambulances and hearses used directly in a trade or business, vehicles used directly in the business of transporting persons or property for pay or hire, and trucks and vans that are qualified nonpersonal use vehicles are not passenger automobiles.

Other property used for transportation covers trucks, buses, boats, airplanes, motorcycles and any other vehicle used to carry people or goods. Even vehicles rated above the 6,000-pound threshold, or used to carry people or property for pay, are still listed property unless they are excepted. The excepted vehicles include clearly marked police and fire vehicles, ambulances and hearses used as such, vehicles with a loaded gross vehicle weight over 14,000 pounds designed to carry cargo, bucket trucks, cement mixers, dump trucks, flatbed and refrigerated trucks, combines, cranes, derricks, forklifts, delivery trucks with seating only for the driver, qualified moving vans, qualified specialized utility repair trucks, school buses, other buses with a capacity of at least 20 passengers used as passenger buses, and tractors and other special-purpose farm vehicles.

The business-use requirement

Here is the heart of the chapter. To claim the section 179 deduction and a special depreciation allowance, and to depreciate listed property using the General Depreciation System and a declining-balance method, the property must be used predominantly for qualified business use, meaning more than 50 percent of its total use. If it is not, then property not used predominantly for qualified business use in the year it is placed in service gets no section 179 deduction and no special depreciation allowance, and any MACRS deduction for any year in which the test is missed must be figured with the straight-line method over the ADS recovery period. The publication adds that being forced onto straight line for one item is not the same as electing straight line, so other property in the same class is unaffected.

Use is allocated on the basis of mileage for passenger automobiles and other transportation, and on the most appropriate unit of time actually used, such as hours, for other listed property. Commuting is never business use, however much work you do on the trip. Someone else’s use of your car does not count as business use unless it is directly connected with your business, you report its value as income to that person and withhold tax where required, or you are paid a fair market rent. If you are an employee, your use counts only if it is for your employer’s convenience and required as a condition of your employment.

Investment use: the two-number trap

Qualified business use is any use in your trade or business. Using an item to manage your investments is investment use, which is not qualified business use, although you can combine business and investment use when you figure the depreciation deduction itself. The publication’s two examples show why both numbers matter. Use an item 50 percent to manage investments and 40 percent in a consumer research business: qualified business use is only 40 percent, so the test fails, no section 179 or special allowance is available and straight line over the ADS period is required, yet the combined business and investment use for the deduction is 90 percent. Change it to 30 percent investment and 60 percent business and the property is used predominantly for qualified business use, section 179 is available, and the combined use is again 90 percent. The calculator above reports both percentages. Enter 40 business, 50 investment and 100 total to reproduce the first example.

If the business use later drops

When you used listed property more than 50 percent for qualified business use in the year you placed it in service but use it 50 percent or less in a later year, you must recapture excess depreciation as income in the first year the test is missed, and increase the property’s adjusted basis by the same amount. Excess depreciation is the depreciation actually allowable, including any section 179 deduction and special allowance, for the earlier years minus what straight line over the ADS period would have allowed for those years. The publication’s example is a pickup truck bought for $18,000 in June 2021 with a $10,000 section 179 deduction. Over 2021 through 2024 the claims totaled $16,618, being the $10,000 election plus $6,618 of MACRS. Straight line over ADS would have allowed $12,600 for those years, so using the truck only 50 percent for business in 2025 brings $4,018 into income. The recapture is figured in Part IV of Form 4797 and reported as other income on the same schedule that took the deduction. For a lessee there is a parallel inclusion amount, with its own percentage tables.

Records and reporting

You must keep records showing the business, investment and personal use of listed property, and Form 4562 is required for depreciation on any listed property regardless of when it was placed in service. A mileage log with dates, destinations and purposes is the usual proof for a car; a time log serves for other items. Generic year-end estimates are the weak point in an audit, so the log should be made at or near the time of each use.

Limits of this page

Aircraft have an additional 25 percent test, and leased listed property, the exception for businesses that regularly lease listed property and employee deductions each have their own conditions in the chapter. For the dollar caps on cars see how much you can depreciate a vehicle, and for the standard mileage alternative see the mileage deduction calculator.

Sources

• IRS Publication 946, How To Depreciate Property (2025): Chapter 5, Additional Rules for Listed Property. Page last reviewed or updated by the IRS April 30, 2026. Read November 2, 2026.

Edition read: Publication 946 (2025), for use in preparing 2025 returns. Limits and percentages quoted are for 2025 unless a page says otherwise. For tax years beginning in 2025 the publication gives a section 179 limit of $2,500,000, reduced dollar for dollar once qualifying purchases exceed $4,000,000, and $31,300 for heavy sport utility vehicles. Its What’s New for 2026 section gives $2,560,000, a $4,090,000 purchase threshold and $32,000. For qualified property acquired and placed in service after January 19, 2025 the special depreciation allowance is 100 percent, with an election for 40 percent in the first tax year ending after that date; for qualified property acquired before January 20, 2025 and placed in service in 2025 it is 40 percent. Check the current publication and form instructions for your tax year. This page summarizes the publication and does not replace it. Marked for human review.