Applicable convention

This convention applies to all depreciable tangible personal property. Exemptions include: • Residential rental and non residential real property • Property subject to mid-quarter convention == Mid-quarter convention ==

If more than 40% of the total basis of property is placed in service during the last three months of the tax year, the mid-quarter convention applies. Exemptions include: • Property that is being depreciated under a method other than MACRS. • Any residential rental property, nonresidential real property, or railroad gradings and tunnel bores. • Property that is placed in service and disposed of within the same tax year. == Mid-month convention ==

The mid-month convention applies only to real property. Under the mid-month convention, one-half month of depreciation is allowed for the month the asset is placed in service or disposed of and a full month of depreciation is allowed for each additional month of the year that the asset is in service. ==References==