Mid-quarter property is property that is
- Depreciated using MACRS
- Placed in service during the last three months of the tax year
- Total depreciable basis of the asset is more than 40% of the total depreciable basis of all MACRS property that was placed in service through the entire tax year
What does Mid-Quarter Property mean?
According to Publication 946,"Use this convention if the mid-month convention does not apply and the total depreciable bases of MACRS property you placed in service during the last 3 months of the tax year (excluding nonresidential real property, residential rental property, any railroad grading or tunnel bore, property placed in service and disposed of in the same year, and property that is being depreciated under a method other than MACRS) are more than 40% of the total depreciable bases of all MACRS property you placed in service during the entire year.
Under this convention, you treat all property placed in service or disposed of during any quarter of the tax year as placed in service or disposed of at the midpoint of that quarter. This means that 1½ months of depreciation is allowed for the quarter the property is placed in service or disposed of."
If you use this convention, the program will enter “MQ” under column (e) in Part III of Form 4562.
Where do I enter my Mid-Quarter Property?
To enter your Mid-Quarter Property, please follow the pathway below.
- Federal (from the navigation menu on the left-hand side)
- Income (from the same navigation menu on the left-hand side)
- Profit or Loss from Rentals and Royalties (from the Income page)
- Check the box indicating that your asset is a Mid-Quarter Property