Types of Property
To determine if you can take a depreciation deduction, you need to be familiar with the types of
property. Property is either tangible or intangible. Different depreciation rules
apply depending on the type of property you own.
What is tangible property?
Tangible property is property that you can see or touch and includes both real and
Tangible real property is land, buildings, and generally anything built or constructed on
land, growing on land, or attached to the land.
Tangible personal property includes cars, trucks, machinery, furniture, equipment, and
anything you can see or touch, except real property.
What is intangible property?
Intangible property is generally any property that has value but cannot be seen or touched. This
includes items such as computer software, copyrights, goodwill, franchises, patents, trademarks, and trade
Personal Property vs Personal use property
Do not confuse personal property with personal use property.
Personal or real property used for personal (nonbusiness) purpose is not depreciable. If you use the property both
for business and for personal use, you can depreciate only the part used for business and must keep records
substantiating business use. Property converted from personal to business use is depreciable from the date placed