Harrison acquires $65,000 of 5- year property in June 2016 that is required to be depreciated using the mid- quarter convention (because of other purchases that year). He did not elect Sec. 179 immediate expensing. Bonus depreciation was not available. If Harrison sells the property on August 23, 2018, what is the amount of depreciation claimed in 2018?

Question

Quizplus · Accepted Answer

The mid-quarter convention applies, and the property is 5-year property. For 2018, Harrison would claim depreciation for half of the third quarter, as the property was sold in August. The depreciation for the third year using the mid-quarter convention is calculated based on the MACRS tables, resulting in $7,312.50.

Harrison Acquires $65,000 of 5- Year Property in June 2016