the applicable recovery period), and the
half-year convention (unless the mid-quarter convention applies), with a switch to the straight-line method in the year that maximizes the deduction.
Generally, for most tangible personal property, the applicable convention is the
half-year convention.
0] can be approximated by using a
half-year convention for start date.
If you use a
half-year convention, you would add a sixth year to the depreciation table, using =IF(OR(A6=1,A6>$B$3),0.
Under the existing law, using the
half-year convention, the asset's 2002 depreciation is $20,000.
The
half-year convention is used under ACRS, meaning that personalty is depreciated for one-half of the year in which it is initially placed in service.
A
half-year convention is used by treating all package designs incurred during the year as having been incurred on the midpoint of the tax year.
For example, for five-year MACRS property (assuming the
half-year convention applies) acquired for $10,000 and placed in service in January 2001, the calculation for 2003 depreciation involved identifying the applicable rate from the table 6 for year 3 (0.
If the taxpayer chooses the assets to which it will allocate the [section] 179 amount, the taxpayer also can affect whether the mid-quarter convention or the
half-year convention will apply to assets.
Had Q placed the radio tower in service in January 1996, it would have been subject to depreciation under the 150%-declining-balance method over a 15-year recovery period and a
half-year convention.
By combining the 30% bonus depreciation enacted by the Job Creation and Worker Assistance Act of 2002 (increased to 50% by the Jobs and Growth Tax Relief Reconciliation Act of 2003) with a cost-segregation study, "qualified" new property eligible for 50% bonus depreciation with a modified accelerated cost recovery system (MACRS) five-year life, using a
half-year convention, could qualify for as much as 60% of cost being depreciated in the first year.
168(d)(4)(A)
half-year convention applies to reduce first- and last-year depreciation by 50%.