On November 7, a calendar year business placed in service $900,000 of 3-year recovery property. If this was the only property placed in service during the year, MACRS depreciation is computed using the:
A) Mid-month convention
B) Mid-quarter convention
C) Mid-year convention
D) Daily pro-ration method

Question

On November 7, a calendar year business placed in service $900,000 of 3-year recovery property. If this was the only property placed in service during the year, MACRS depreciation is computed using the: 
A) Mid-month convention
B) Mid-quarter convention
C) Mid-year convention
D) Daily pro-ration method

Quizplus · Accepted Answer

The mid-quarter convention is used when more than 40% of the total depreciable basis of property is placed in service in the last quarter of the tax year. Since the property was placed in service in November, which is in the last quarter, the mid-quarter convention applies.

On November 7, a Calendar Year Business Placed in Service