Declining-Balance Short-Year Calculation

For a declining-balance short year, the amount of depreciation computed for a full year is prorated over the number of months in the short-year period. The system prorates the amount of depreciation computed for a full year by multiplying the amount by the short-year fraction.

The prorated amount is deducted from the remaining depreciable basis at the beginning of the short-year period to determine the remaining depreciable basis at the beginning of the following taxable year.