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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 personal property.

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 names.

 

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 in service.


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