Midquarter Convention

The Tax Reform Act of 1986 created a midquarter convention to be used if more than 40% of the aggregate depreciable basis of newly acquired qualifying MACRS property (generally, personal property) is placed in service during the last three months of a tax year. Under this midquarter convention, qualifying MACRS personal property is treated as though you placed it in service in the middle of the quarter in which you purchased it.

Note: When applicable, the midquarter convention can be used for all MACRS property except residential rental and nonresidential real property. It is used for MACRS 3-, 5-, 7-, 10-, 15-, 20-, and 25-year property (unless the half-year convention applies). When applicable, the depreciation method RH is eligible for the midquarter convention (unless the half-year convention applies).