[.]

How would you calculate MACRS using the tables if you sell a property before it has been fully depreciated? I’d like to know how to do this for real estate and personalty. And mid quarter vs half year personalty.

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

Wiley CPA Excel & Ninja MCQ

[tuanxn]

You calculate half the normal depreciation for the year of disposal.

For example, say you're using half-year convention, it's 5-year property, and you dispose of it in the 3rd year.
Depreciation for the entire year in year 3 is 19.2% of the depreciable base (based on the MACRS table).

If you dispose of the asset ANYTIME during the third year (doesn't matter if you dispose of it on the 2nd day of the year
or the 2nd to last day of the year), you'll pretend that the asset was disposed of in the middle of the year and thus take
a half year of depreciation on the asset for year 3. This means depreciation for year 3 is 9.6% (half of 19.2%) of the
depreciation base.

Same for quarter-convention. In the quarter that you sold the asset, you pretend you sold it in the middle of the
quarter, so you take half that quarter's depreciation.

[.]

Thank you. So basically you just use the rate that you would normally use from the table and multiply it by 50%. This would be the same for realty (mid-month convention)?

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

Wiley CPA Excel & Ninja MCQ

[tuanxn]

yup

[Author]

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