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Difference in IRS Convention Periods

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Discuss the difference between half-year, mid-quarter, and mid-month conventions. What type of asset falls into each category and why do you think the IRS code has these different categories.

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This solution discusses the differences in IRS convention methods.

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The main difference between each of the conventions listed is what is required for use by the Internal Revenue Code. The half-year convention is the main convention used unless income tax code stipulates otherwise. This indicates that depreciation for the asset starts at the half-year point based upon the date that the asset is placed into service. A ...

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