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Sunny19

Depreciation method for half months

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Are there any depreciation methods that will calculate depreciation by half months? If an asset is entered in the last half of the month, a half months worth of depreciation will be calculated in the month it in entered?

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    Hello Sunny,

    No, there is not a not a method in the system which will calculate a half month if any asset is Placed-in service in the last half of the month. The is MF100, for R property and a life greater than 20 years which does calculate a half month, but that only happens for a particular set of Tax rules.

    ~Delray

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    Hi Sunny19,

    The method RM calculates 1/2 month of depreciation in the place-in-service month of the asset. RM can be used with any Property Type.  The asset's disposal month or last month of its recovery life gets the remaining 1/2 month of depreciation. RM calculates straight-line depreciation over the remaining life of the asset, with the midmonth averaging convention (50% in 1st month, 50% in last month). If used for a depreciation book where Form 4562 is run, it is treated as an ADS (alternative depreciation system). 

    AD: Edited above to change RH to RM. Thanks for catching the error, Delray!

    RM = Remaining Value over remaining life, with midmonth convention

    RH = Remaining Value over remaining life, with half-year convention

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