If a machine (seven-year property) being depreciated using the half-year convention is disposed of during the seventh year, a taxpayer must multiply the appropriate depreciation percentage from the MACRS table percentage by 50 percent to calculate the depreciation expense properly.

Question

Quizplus · Accepted Answer

This statement is true. Under the half-year convention, a seven-year property is depreciated as if it was placed in service halfway through the year, regardless of its actual acquisition date. Therefore, if the machine is disposed of during the seventh year, only half-year depreciation is allowed, which is calculated by multiplying the appropriate MACRS percentage by 50 percent.

If a Machine (Seven-Year Property) Being Depreciated Using the Half-Year