Mid-month Convention

Mid-month Convention

Mid-month Convention is used.

with respect to depreciating residential and nonresidential real property and railroad grading or tunnel bore, a convention whereby property is deemed placed in service or disposed of at the midpoint of the calendar month in which it was placed in service or disposed of.

Midquarter convention

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In general, business property is depreciated under a midyear rule that allows half a year's depreciation for the first year, whether the taxpayer buy property in January or December. However, if the taxpayer buy more than 40% of the business property the taxpayer put into service for the year during the fourth quarter, the midquarter convention takes over. With it, the taxpayer depreciate each piece of property as though it were placed into service in the middle of the calendar quarter in which it was purchased. the taxpayer claim just six weeks' worth of depreciation for property put in service during the final quarter, for example.

See Depreciation in the United States Encyclopedia of Law and Depreciation in the World Encyclopedia of Law.

Description and Definition of Mid-month Convention

The tax rule that treats certain kinds of depreciable property, including real estate, as though it were placed in service in the middle of the month it was first used.

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