Mid-quarter Convention

Mid-quarter Convention

Mid-quarter Convention means:
a convention whereby property is deemed to be placed in service at the midpoint of a quarter for depreciation purposes.

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-quarter Convention

If you buy more than 40% of the depreciable property you put into service for the tax year during the fourth quarter the mid-quarter convention applies. You depreciate each piece of property as though it were placed into service in the middle of the calendar quarter in which it was purchased. This allows six weeks of depreciation for property put in service during the last quarter of the year.

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