Assets used at home and work

You are not allowed to depreciate personal assets used outside of your business, like the family car or your personal computer. However, you can depreciate a portion of a mixed-use asset, such as a vehicle used for both business and personal trips. This rule applies to all kinds of property, not just autos.

To determine what portion of a mixed-use asset you can depreciate, you must figure out what percentage of its use is for strictly business purposes. This allocation is ordinarily made based on the amount of time the asset is used for business, versus the amount of time it is used for personal reasons.

For some assets, time is not the most appropriate measure. For example, if you own your home and use a portion of it exclusively for business activity, you may be able to depreciate some of its cost. The depreciable amount is based on the percentage of square feet used for business. For a vehicle, keep a mileage record that shows the number of miles you drive for business purposes.