A taxpayer places in service $55,000 of 5-year property on August 16, and $45,00

Question

A taxpayer places in service $55,000 of 5-year property on August 16, and $45,000 of 7-year property on December 2. Assuming the taxpayer elects not to take Section 179 expense on either property, which of the following statements is correct?

The taxpayer uses the half-year convention to depreciate the 5-year property, but uses the mid-quarter convention to depreciate the 7-yearproperty.

The taxpayer uses the mid-quarter convention to depreciate the 5-year property, but uses the half-year convention to depreciate the 7-yearproperty.

The taxpayer can elect to depreciate the 5-year property using alternative MACRS (straight-line), but can use regular (accelerated) MACRS to depreciate the 7-year property.

If the taxpayer elects to depreciate the 5-year property using ADS, the taxpayer must also depreciate the 7-year property usingADS.

None of the above arecorrect.

Explanation / Answer

The taxpayer uses the mid-quarter convention to depreciate the 5-year property, but uses the half-year convention to depreciate the 7-yearproperty. is correct

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