CPA#1 wrote: SourPatch wrote: I'm taking on the 24th too.. 3rd try, after 71, 65. We got this! REG is going to bleed to death!!!!

Hahahaaaaaaaaa that's a good one cpa#1, that's the attitude you need to have......wish you all goodluck and good luck to me too..........

Hey everyone

Can everyone help me with the MACRS depreciation rules. I am listening to Becker CPA review, on the R3-27, the instructor explain about the mide-quarter convention and on the bottom of the page, he draw a time line and divide into 4 quarters (1/1, 4/1, 7/1, 10/1, 12/31). Here is what i am confused about: he said from 1/1 to 4-1, the first quarter you get 87.5%. the second quarter you get 62.5% (difference b/t 75% and 50%), the third quater you get 37.5%, and 12.5% in the last quater. What is he trying to explain there. And how he got those %?

ThX

James 

@gjtseng:  You don't need to know how to calculate those percentages, but it helps you understand the concept.  The easiest way to grasp the mid-quarter thing is to use "quarters" and "half-quarters"  Let me explain---if a company buys a Machine on January 1 and it is "PLACED IN SERVICE"  on January 1...you would think they can take a full year of depreciation which would be 4 quarter out of 4 quarters or 4/4 = 1 or 100%.  But the mid-quarter rule says you only take half a quarter, hence the mid.  So you look back at the end of the year and your fraction will be 3.5/4 = .875.    If instead you 'PLACED IN SERVICE" on October 1.  The machine was placed in the 4th quarter so you will use half of the 4th quarter to get the percentage...  .5/4 = .125.   Remember each full quarter is .25 so half of that is .125  

Hope this helps!