[startupcfo]

What happens if the vast majority of your assets were purchased on February 1st? How would I know whether to use mid-quarter vs mid-month calculations methods for depreciation?

————
MCQ899 reads as

Nina Co., a calendar-year taxpayer, placed in service office furniture costing $10,000 on February 1, Year 3. Additional office furniture costing $10,000 was placed in service on November 1, Year 3. These were the only assets purchased during the year. Under MACRS depreciation, the appropriate convention and amount is:

Correct A.
mid-quarter $20,000.

B.
mid-quarter $10,000; half-year $10,000.

C.
half-year $20,000.

D.
mid-month $20,000.

BEC - 87 | 02/28
REG - 70 | 06/10, REMATCH | 08/30
AUD - XX | 09/10
FAR - XX | 12/10

[Andyred04]

If 50% or more of your asset acquisitions occurred in the last quarter of the year you use the mid-quarter method on all acquisitions. If 51% or more of your asset acquisitions occurred in Q1-Q3, use the mid-month method on all acquisitions.

FAR: 80 (Gleim, Ninja Notes, Ninja MCQs)
REG: 87 (Gleim, Ninja Notes, Ninja MCQs)
BEC: 87 (Gleim, Ninja Notes, Ninja MCQs)
AUD: 8/27/16

PA Candidate

[hawkgolf12]

First you must determine what type of property is being depreciated. Half year and mid quarter depreciation methods are used for Personal Property, where as mid month is ALWAYS used for Real Property. In this example, office furniture is being depreciated and is considered personal property.

Personal Property = Cars, Trucks, Furniture, Fixtures, Equipment
– Mid quarter is used when 40% of all assets placed in service during the year are in Quarter 4.
– Half year is used when mid quarter doesn't apply.

Real Property = Residential (Apartments) & Non-Residential (Office Buildings, Warehouses)
– Residential depreciates using 27.5 Year Straight Line
– Non-Residential depreciates using 39 Year Straight Line

In this example, $10,000 of the $20,000 (50%) was placed in service Q4. Therefore, you must depreciate the entire $20,000 as mid quarter for Year 3.

REG - 8/9/16
AUD - 9/8/16
FAR - 10/28/16
BEC - TBD

Becker & Ninja MCQ

[A1lessio]

hawkgolf12 – very helpful thanks! I had it all jumbled up after doing lectures and questions last night.

AUD (08/02/2016)

[startupcfo]

@hawkgolf, What is your background that you can answer with such detail? Are you working in the tax dept at a public firm?

Okay, so how would I figure out the number of years required for depreciation on the furniture?

BEC - 87 | 02/28
REG - 70 | 06/10, REMATCH | 08/30
AUD - XX | 09/10
FAR - XX | 12/10

[hawkgolf12]

@starup, I've worked two tax internships, but that hasn't helped me with studying necessarily. I just finished studying REG and that's how I remembered the material. From my experience on the exam, the question would give you 5 year furniture or 7 year furniture in the wording, not something you have to figure out.

REG - 8/9/16
AUD - 9/8/16
FAR - 10/28/16
BEC - TBD

Becker & Ninja MCQ

[.]

All the stuff that hawkgolf listed is in any review course. Here is what my book says:

While there are numerous class lives for personalty, some of the more common are three years (race horses), five years (automobiles, trucks, computers and peripheral equipment, copiers, other office equipment; most assets used in professional services and in retail; appliances and furniture used in rental real estate), and seven years (office furniture and fixtures; agricultural and other machinery). A 200% declining balance method is used for these classes. Land improvements are included in the 15-year class and are depreciated using the 150% declining balance method.

FAR - June 2016 - 88
REG - July 2016 - 89
AUD - Aug 2016 - review phase currently
BEC - Sep 2016 -

Wiley CPA Excel & Ninja MCQ

[Author]

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