Types of Property
An asset's property type often dictates the depreciation method you should use in the depreciation calculation. Businesses use two general types of property: personal property and real property. Under the Internal Revenue Code, personal property includes all depreciable property other than real estate (real property). Real property includes buildings and their structural components.
Note: You designate qualifying property as Indian Reservation property by selecting depreciation method MI, rather than by selecting a specific property type.
Within the two broad property type categories (personal and real), the Internal Revenue Code makes further distinctions for depreciation purposes. The application identifies property by the following types:
General Personal Property (Type P)
Light Trucks and Vans (Type T)
Listed Personal Property (Type Q)
General Real Property (Type R)