At least what duration does the useful life have to be for tangible personal property to qualify as capital equipment?

Tangible personal property must have a useful life of at least one year to qualify as capital equipment. This qualification is significant because capital equipment refers to assets that are used in the production of goods or services over an extended period. The rationale behind this timeframe is to ensure that such equipment is an integral part of a business's operations, providing benefits and contributing to its revenue generation over multiple accounting periods.

If the useful life were shorter, it would imply that the asset is more like expendable supplies rather than an investment in long-term capital, which typically involves depreciation and affects financial reporting and tax considerations. Therefore, items that provide utility beyond a year are deemed essential for capital asset management and financial planning.