CCH Axcess Tax

MACRS Conventions

Every MACRS asset placed in service in the current tax year is subject to either a half-year, mid-month, or mid-quarter convention. These conventions apply ONLY to assets with a method of "M," "ME," "MT," "MSL," or "ADS." The applicable convention is determined as follows:

Class Life of Property	Convention
3, 5, 7, 10, 15, 20 or 25	Half-Year or Mid-Quarter Convention
27.5, 31.5, 39, 40, or 50	Mid-Month Convention

The half-year convention assumes property is placed in service during the mid-point of the current tax year.

The mid-month convention assumes property is placed in service at the mid-point of the indicated month.

If more than forty percent of the business portion of the depreciable basis of tangible personal property (MACRS) assets are placed in service during the last quarter of the current tax year, the mid-quarter convention is applied to MACRS personal property. A diagnostic message is issued indicating the mid-quarter convention is applied. The mid-quarter convention assumes property is placed in service during the mid-point of the computed quarter.

The cost of property acquired with a life of 27.5, 31.5, 39, 40, and 50 years is disregarded when applying the 40 percent test.

Notes:

MACRS personal property bought and sold in the current tax year is not included when determining if the mid-quarter convention applies. The convention computation may be overridden by making an entry on the Depreciation Options and Depletion Overrides worksheet, Depreciation Options and Overrides section, MACRS Convention Options field.
Depreciation for all short year business returns is computed using the "SIMPLIFIED METHOD" only. A detailed discussion of the calculation of short year depreciation is located in the Depreciation Options and Depletion Overrides worksheet section.