Mid-Month Convention

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Mid-Month Convention

A method in which the owner of some asset is allowed one half-month of depreciation in the month that the asset is purchased or sold (or otherwise disposed of). That is, the mid-month convention treats assets purchased or sold any time during a month as having been purchased or sold on the day half-way through that month.
References in periodicals archive ?
Assets subject to the mid-quarter or midmonth convention must be grouped in a GAA with assets placed in service in the same respective quarter or month;
Under the modified accelerated cost recovery system (MACRS), depreciable nonresidential real property placed into service after May 12, 1993, is generally subject to a 39year cost recovery period, using the straight-line method and midmonth convention [IRC section 168(c)].
5 years using the straight-line method and midmonth convention.
If either the relinquished or replacement property is property for which the applicable convention (determined under section 168(d)) is the midmonth convention, the exchanged basis must be depreciated using the midmonth convention.
5-year recovery period using the straight-line method and the midmonth convention beginning in July 2004.
She depreciates the room under IRC section 168 as nonresidential real property using the optional depreciation table that corresponds with the general depreciation system, the straight-line method of depreciation, a 39-year recovery period, and the midmonth convention.
To calculate depreciation, B uses the depreciation table that corresponds with the general depreciation system--nonresidential real property, midmonth convention, straight-line over 39 years.
To calculate depreciation, W uses the depreciation table that corresponds with the general depreciation system--nonresidential real property, midmonth convention, straight-line over 39 years.
But for the extension of these provisions, the property would be treated as nonresidential real property and be depreciable over 39 years using the midmonth convention.
Residential rental property and nonresidential real property subject to the ADS is depreciated using the straight-line method, a recovery period of 40 years, and the midmonth convention.
The annual depreciation rate is different in the first and last year the property is placed in service because of the application of the midmonth convention.