Putting Personal Property to Business Use
You may already own some items that can be useful to your business, such as a home computer, office furniture, and a cell phone. You don't have to go out and buy new items for the business; you can convert what you already own from personal to business use.
For depreciation purposes, the basis of each item is the lower of its adjusted basis (usually its cost) or its value at the time of conversion. For most items that decline in value over time, this means that depreciation is usually based on value. But for other property, such as realty that typically increases in value, depreciation is usually based on adjusted basis.
You cannot use first-year expensing for property you convert from personal to business use in a year that is after the year you acquired the property. The law limits expensing to the year in which property is initially placed in service (and that is usually prior to the year it is first used in business).
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