Half-Year, Mid-Quarter, or Mid-Month: Which MACRS Convention Applies?
The convention determines when property is treated as placed in service for depreciation timing.
Half-year convention
Qualifying personal property is generally treated as placed in service at the midpoint of the tax year when the half-year convention applies.
Mid-quarter convention
When the applicable concentration test is triggered, personal property is treated as placed in service at the midpoint of the relevant quarter.
Mid-month convention
Residential and nonresidential real property generally use a mid-month convention under MACRS.
Exam strategy
Classify the asset first, then determine whether a special timing rule overrides the normal convention. Use current-year materials for exact tests.
The takeaway
Real property generally points to mid-month. Personal property generally starts with half-year unless the mid-quarter rule is triggered under current law.
Related Summit guides
FAQ
Does real property generally use mid-month?
Yes.
Can personal property use mid-quarter?
Yes when the applicable test is met.
Should exact current thresholds come from current CPA materials?
Yes.