Listed Property

The term listed property refers to a kind of property that can be deprecated and used mainly for the company's organization. In order to be considered a listed property, an item needs to be used strictly for business purposes more than half of the time. Meaning for the rest of the time assets may be used for personal purposes. For example, you can use a computer at home for personal purposes and at work for business. The same could also be applied to a car and other assets. 

Some of the examples of what is considered to be listed property include computers, recording equipment, and vehicles.

Listed property explained

Listed property refers to any assets that a business uses for more than half of the time only for business purposes. The value of these assets can decrease over time, and it is possible to use them in every-day business operations. Those assets are also for personal use. 

According to the Internal Revenue Service (IRS), listed property includes:

• Passenger cars that weigh less than 6000 lbs (except for vehicles that are not intended for personal use) 
• Properties used for recreation and amusement
• Vehicles that are used as means of transport of both people and goods.

In order to keep people from claiming tax deductions for personal use of property and pretending that it was not used in a trade, the listed property rules were introduced. These rules require companies to track the amount of money paid for each property and keep track of assets a company uses as listed property, the original cost of the property, and other similar expenses.

Special considerations

The cost of using listed property cannot be considered a part of business expenses. The predominant use test must be applied to every item of listed property. This test is usually performed in order to claim a detriment and a bonus depreciation.

Listed property should not be confused with listed buildings. A building is listed when it is of special architectural or historical interest in a national context. Listed buildings have extra legal protection within the planning system. This term is widely used in the United Kingdom. 

Advantages of listed property vs. unlisted property

There are 3 advantages of investing in the property via listed vehicles over direct investment.

1. Diversification. Many listed property vehicles cover the retail, industrial, and commercial office sectors. Therefore, you gain exposure to billions of dollars worth of property across various property sectors in different regions. The impact of something negative occurring to a tenant or property is instantly reduced, due to the diversification of the portfolio.
2. Property managers. Listed property investors benefit from the resources of property professionals in charge of managing, developing, and adding value to their property portfolios, as well as their ability to seek out new investment opportunities.
3. Liquidity. Liquidity relates to the ease with which an investment can be turned back into cash. Listed property of vehicles are highly liquid, as you are able to sell your investment quickly and easily. On the other hand, direct investment and property have low liquidity. It takes time to market and sell. As a result, it can have higher transaction costs. 

Listed property examples

There are several types of assets that are considered to be listed property. They are:

• Boats, cars, airplanes, buses and other means of transportation;
• Equipment that is used in an office setting;
• Audio and video equipment