The mid-quarter convention is an accounting method used to determine the depreciation of assets placed in service during the last three months of the tax year. Under this convention, assets are treated as if they were acquired in the middle of the quarter, affecting the amount of depreciation that can be claimed. This method is particularly important for determining depreciation deductions under the Modified Accelerated Cost Recovery System (MACRS) and is also relevant when considering bonus depreciation, as it impacts how the depreciation deduction is calculated for assets acquired in specific timeframes.
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