US equipment depreciation: prove when the machine was ready
A machine paid for in December may become ready for business in January. Another may be ready in December even though its first production run waits until January. For US federal tax depreciation, establish when the equipment was ready and available for its specific use before deciding what the year-end purchase means.
Delivery answers only part of the question
The federal placed-in-service test concerns readiness and availability for a specific use. The invoice shows the purchase, and a delivery record shows arrival. Neither establishes that a machine requiring installation could perform its intended function at that point.
IRS Publication 946 illustrates the distinction with equipment delivered in one year and made operational in the next. Its examples also show that equipment already ready on delivery can be placed in service then, even if actual use starts later. A modified truck's intended function matters in the same way: the required lifting installation must be complete before the truck is ready for that use.
The practical question is what remained unfinished. Was essential installation outstanding, or was the machine fully operational while management voluntarily waited for an order? A software date field cannot answer that. This discussion assumes owned, depreciable tangible business equipment and otherwise established business use; vehicles, leases, personal conversions and property with special rules need their own assessment.
One purchase, two possible year ends
These prospective dates, amounts and circumstances are hypothetical. A calendar-year business buys a machine for $48,000 on 10 December 2026 and receives it on 21 December. Installation and functional testing are necessary for its intended business use. Ownership and depreciability are assumed established.
In the first scenario, installation and the necessary testing finish on 6 January 2027. The machine becomes ready and available that day. On those facts its placed-in-service year is 2027. The December payment and delivery do not establish a 2026 depreciation deduction.
Now change the readiness facts. In an independent alternative, installation and testing finish on 29 December 2026 and the machine is ready and available then. Management chooses to wait until 11 January 2027 for the first production run. Its placed-in-service year is 2026 on those assumed facts. Voluntarily postponing production does not itself postpone readiness.
The $48,000 invoice is identical in both scenarios. The difference sits in the installation and readiness evidence. These are two alternative fact patterns, not two dates the owner can choose between for the same completed work.
| Record | What it establishes | What remains to check |
|---|---|---|
| 10 December purchase and payment | Acquisition and cash movement | Whether equipment is ready |
| 21 December delivery | Equipment has arrived | Unfinished installation and testing |
| 6 January readiness, scenario one | Ready and available in 2027 | Applicable deduction calculation |
| 29 December readiness, alternative | Ready and available in 2026 | Applicable deduction calculation |
Give the preparer the readiness file
Keep purchase, delivery, placed-in-service and first-use dates separate. Describe the intended function and the unfinished work at delivery. Depending on the asset, useful support may include installation records, testing logs, supplier correspondence or a sign-off. These are suggested ways to support the facts, not a universal requirement for a document called a commissioning certificate.
Where records disagree, resolve the discrepancy before treating an asset-additions spreadsheet as final. For example, a December delivery note and January testing record may be entirely consistent. The file should explain whether that testing was necessary to make the equipment ready or followed readiness already achieved.
The date is an input to the deduction calculation. Basis, qualifying property, acquisition conditions, recovery method, conventions and elections still matter. Section 179 and the special depreciation allowance have separate requirements; a 2026 readiness date alone does not promise full expensing. Keep the supported timing conclusion with those separate tax calculations and the financial-reporting asset records. No depreciation amount has been calculated here.
Sources and context, checked :