Personal use codes

Personal use codes are used to determine the affect of depreciation and tax credits if an asset falls below a certain percentage of business use. It is also used to set annual depreciation limits for listed assets. Under U.S. Federal tax laws, the passenger automobile property type is limited in the amount of depreciation that can be annually taken.

Calculating Depreciation for Listed Assets

Under the Depreciation Limits tab for the personal use code annual depreciation limits can be defined for an asset.

1. The listed asset's annual depreciation is calculated twice:
   • One time using the asset's designated depreciation calculation method
   • One time using the specified depreciation limit
2. The lower of these two annual depreciation values is selected by the asset accounting solution as the annual depreciation for the listed asset.

If the depreciation limit for a personal use code is used as the annual depreciation for any of the years that an asset is in service, the asset's basis is not fully depreciated by the end of the asset's standard life. In this case, you can give the asset a new life span called a recovery period. The recovery period can use the asset to continue depreciating until the asset's basis reaches zero.