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From: johnson@hplabs.UUCP (Mark Scott Johnson)
Newsgroups: net.taxes
Subject: Re: Deducting Personal Computers?
Message-ID: <1758@hplabs.UUCP>
Date: Mon, 22-Aug-83 14:41:32 EDT
Article-I.D.: hplabs.1758
Posted: Mon Aug 22 14:41:32 1983
Date-Received: Wed, 24-Aug-83 02:30:04 EDT
References: <1756@hplabs.UUCP>
Organization: Hewlett Packard Labs, Palo Alto CA
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To the best of my knowledge, the issue of whether or not a computer
professional can write-off a personal computer is murky.  If it's
used in a consulting business, clearly it can be written off on
Schedule C (business income and expenses).  If it's used exclusively
for managing investments, it's a miscellaneous Schedule A deduction
(altho if the amount claimed is greater than the income derived, the
IRS might well contest the deduction as "unreasonable").  The big
unknown is whether you can write-off a personal computer merely as
a professional expense (miscellaneous Schedule A deduction) when you
are an employee.  I'm sure the IRS will take a dim view of this.
(Can anyone cite cases?)  If you're in this third class, I recommend
getting your employer to write a letter verifying that the computer is
"necessary and reasonable" for your job, but not provided by the employer.

If all events, if your computer is used for personal stuff more than a
small amount (say, 5-10%), I'm sure the IRS expects you to prorate based
on your use.

In general, a computer must be capitalized since it has a lifetime
exceeding one year.  If you're a business, you can now expense up to
$5000 of stuff that would normally be depreciated.  The advantage is
greater immediate reduction in taxes; the disadvantage is loss of an
investment tax credit.  I don't believe this $5000 expense rule
applies to any use other than as a Schedule C business.  (Does anyone
know for sure?)

-- 
Mark Scott Johnson