A used machine bought second hand belongs on Form 4562, form 4562, carried to schedule c line 13.
Why form 4562
Used property is treated the same as new for Schedule C purposes: you list the machine on Form 4562 at what you paid, pick your method, and the result flows to line 13. Section 179 applies to used equipment as long as it is new to you, and bonus depreciation has applied to qualifying used property acquired since 2017, so a second-hand purchase is not the disadvantage people assume. Your basis is the cash price plus freight and installation, which matters most on private sales where there may be no formal invoice.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so a used machine bought second hand lands on Line 4562 without you sorting it.
Start for freeWhat a used machine bought second hand is confused with
- Line 13, depreciation and section 179 expense deduction
- The machine itself goes on Form 4562; line 13 only shows the total depreciation and section 179 figure for the year.
- Line 21, repairs and maintenance
- Getting a used machine working again after purchase can be a capital cost of putting it in service rather than a line 21 repair, so time the work carefully.
- Line 22, supplies
- Cheap second-hand items under your de minimis expensing policy can simply be deducted as supplies on line 22.
Examples that belong on form 4562
- A used 6,000 dollar embroidery machine bought from a closing shop
- A second-hand 15,000 dollar excavator attachment package
- A 2,800 dollar refurbished espresso machine with a dealer warranty
- A 1,200 dollar used table saw from a private seller, documented with a bill of sale
- A used machine plus 600 dollars of freight added to basis
What does not belong here
- Property acquired from a related party, which is excluded from bonus depreciation
- A trade-in valued at an invented figure rather than the actual price paid
- Property you previously used personally, where basis is limited by fair market value at conversion
- Repairs performed after it was placed in service, which are line 21
The limit that applies
Section 179 is available on used property that is new to you; bonus depreciation also covers qualifying used property, but not property acquired from a related party, and its annual percentage is set each year.
What to keep
Get a bill of sale with the seller's name, the date, the machine and the price, even on a private purchase, and keep freight and installation invoices as part of basis. Photograph the serial plate so the asset on your schedule can be identified later.
Other expenses on form 4562
| Expense | Line |
|---|---|
| a new roof on a business building | Form 4562 |
| a website build | Form 4562 |
| a work van or truck | Form 4562 |
| buying a business vehicle | Form 4562 |
| expensing or capitalising a purchase | Form 4562 |
| improvements to a rented studio | Form 4562 |
| legal fees to buy property or defend title | Form 4562 |
| sales tax paid on a capital asset | Form 4562 |
| workshop machinery such as a 3D printer | Form 4562 |
Related lookups
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Sources
This page explains how Schedule C lines work. It is general information, not tax advice for your situation. If an expense is large or the answer turns on a fact about your business, confirm it with your tax preparer.
Looking for a different expense? The full Schedule C line lookup has every line from 8 to 27 with the expenses that belong on each, and Schedule C expense categories walks the whole form in order.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so a used machine bought second hand lands on Line 4562 without you sorting it.
Start for free