Harrison acquires $65,000 of 5-year property in June 2011 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 23,2013,what is the amount of depreciation claimed in 2013?

Question

Quizplus · Accepted Answer

Using the mid-quarter convention, the property is assumed to have been placed in service on July 1st of the year it was purchased. Therefore, in 2011, Harrison can claim 50% of the 5-year depreciation, which is $6,500. In 2012, he can claim 50% of the remaining balance ($58,500), which is $29,250. This leaves a remaining balance of $29,250 for 2013. Since he sells the property on August 23, 2013, Harrison can claim 25% of the mid-quarter convention depreciation, which is ($29,250 x 25%) = $7,312.50.

Harrison Acquires $65,000 of 5-Year Property in June 2011 That