Form 4562 is used to claim deductions for depreciation and amortization, make the Section 179 election to expense certain property, and provide information on the business or investment use of listed property such as automobiles, certain vehicles, aircraft, and property used for entertainment, recreation, or amusement. When reporting property details, including the depreciation method, specific instructions apply depending on the type of property and how it is being depreciated.
Depreciation Method and Convention for Listed Property (Part V)
- Column (g) — Method/Convention: For listed property (e.g., automobiles), you must enter the depreciation method and convention used. Valid entries include:
- Method: 200 DB (200% declining balance), 150 DB (150% declining balance), or S/L (straight line).
- Convention: HY (half-year), MM (mid-month), or MQ (mid-quarter).
- Pre-1987 Property: If property was placed in service before 1987 and depreciated under ACRS, enter "PRE". If you elected an alternate percentage or are required to use straight-line depreciation, enter "S/L".
- Caution for Trade-Ins: If property was acquired through a trade-in, special rules apply for basis, recovery period, depreciation method, and convention. Refer to the instructions for property acquired in a like-kind exchange or involuntary conversion, or Regulations section 1.168(i)-6(d)(3).
General Depreciation System (GDS) for Non-Listed Property (Part III)
- For assets placed in service during the tax year (e.g., 2025) and depreciated under the General Depreciation System (GDS), use lines 19a–19j.
- Column (f) — Method: Enter the depreciation method (e.g., 200 DB, 150 DB, S/L).
- Column (e) — Convention: Enter HY, MM, or MQ as applicable.
- Note: Automobiles and other listed property are reported in Part V, not Part III.
Section 179 Election (Part I)
- Use Part I to elect to expense certain property under Section 179.
- The election must be made on Form 4562 filed with either the original return for the tax year the property was placed in service or an amended return filed within the prescribed time.
- If you have multiple businesses or activities, you may allocate the Section 179 deduction among them. Enter "Summary" at the top of Part I for total amounts, then allocate to each business on separate Forms 4562.
Recordkeeping and Additional Resources
- Except for Part V (listed property), detailed depreciation information does not need to be submitted with your return, but must be maintained in your permanent records.
Source:
Form 4562 Instructions
Disclaimer: Always verify details with current Federal or State Department of Revenue Forms and Instructions. Tax laws and regulations may change; consult a CPA or tax professional for personalized advice.