The mid-quarter convention under MACRS provides that
A)Depreciation is allowable in the year of acquisition of qualified property only if the property is placed in service in the first one-fourth of that year.
B)One half of the year-of-acquisition depreciation is allowed regardless of when the property is placed in service during the year. One-half year's depreciation is allowable for the year of disposition.
C)The cost recovery deduction is based on the number of months the property was in service in the year of acquisition. Therefore, one-half month's cost recovery is allowable for the month in which the property is place in service and for the month of disposition.
D)Any property placed in service in the last 3 months of a tax year is depreciated using this convention.
E)Depreciation is calculated from the middle of the quarter in which an asset is placed in service through the end of the year.

Question

Quizplus · Accepted Answer

The mid-quarter convention under MACRS provides that depreciation is calculated from the middle of the quarter in which an asset is placed in service through the end of the year. This convention applies when more than 40% of the depreciable basis of all property placed in service during the year is placed in service during the last quarter of the tax year. The other choices are either incorrect or incomplete in describing the mid-quarter convention.

The Mid-Quarter Convention Under MACRS Provides That