Can I place the arcade game in my home office?
Yes, but with important caveats. If you have a legitimate home office that qualifies under IRC § 280A (used regularly and exclusively for business), placing an arcade game in a break area or client meeting space within the business portion of your home can qualify. However, the game’s use must be carefully tracked since the […]
What happens if business use drops below 50% in a later year?
If the qualified business use percentage falls to 50% or below in any year during the MACRS recovery period (7 years for arcade games), you must ‘recapture’ the excess depreciation previously claimed. This means you would need to report additional income equal to the difference between the bonus/MACRS depreciation you claimed and the amount you […]
How do I prove business use exceeds 50%?
You must maintain contemporaneous records — meaning records created at or near the time of use, not reconstructed later. For an arcade game in a business setting, this typically involves: (1) documenting the hours the game is available during business operations, (2) logging any personal use hours (e.g., owner or family using the game after […]