Depreciation Items from past year

[parvitstax]

If I began my business in 2023 but I purchased a brand new computer in 2020. Can I depreciate this item in 2023? Business use is now 100% for 2023 and obviously 0% for prior years. My thinking is this should be ok since I would lose the first 3 years of the 5 year depreciation window but curious what is correct in terms of depreciating items. 

[rbynaker · Accepted solution]

When you convert an item from personal use to business use, you place it in service at the lower of cost basis or FMV at the time of the conversion.  What's the fair market value of a 2020 computer?  Maybe you can search the model number on ebay and find one for sale.

[parvitstax]

What if the FMV increases? Do you use the 2020 value instead if the 2023 value is higher?

[dkh]

What if the FMV increased ??????    What computer purchased in 2020 would have a current FMV greater than the original purchase price?         

[parvitstax]

It's a general scenario but this happened to many computers with certain GPUs. 

[IRonMaN]

Somebody should tell Jim to sell his Intuit stock and start investing in computers. 😁

[Just-Lisa-Now-]

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@parvitstax wrote:

What if the FMV increases? Do you use the 2020 value instead if the 2023 value is higher?

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FMV at the time of conversion OR purchase price, which ever is LOWER