Listed Property
A category of depreciable assets that are susceptible to personal use, subject to additional substantiation and record-keeping requirements. If business use falls to 50% or less, the property must be depreciated using the Alternative Depreciation System (ADS) straight-line method.
Depreciation Recapture
A tax provision that requires taxpayers to recognize ordinary income when they sell a depreciated asset for more than its adjusted basis, or when business use drops below the required threshold. The recaptured amount is the difference between the depreciation claimed and what would have been allowed.
Substantiation Requirements
The documentation and record-keeping obligations that taxpayers must satisfy to claim certain deductions. For listed property, these include contemporaneous records of business use, date placed in service, cost, and business purpose.
Form 4562
The IRS form used to claim depreciation and amortization deductions, including bonus depreciation and Section 179 expensing. Part V of Form 4562 specifically addresses listed property and requires detailed reporting of business use percentages.