Applying mid-quarter convention - Posted by Ellen

Real Estate Investing Real Estate Law
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Posted by MikeC NJ on March 14, 2006 at 12:08:01:

Ellen,

Are you asking about depreciating the property or items purchased for each property? IRS Publication 527 states that all residential rental property and nonresidential real property must be depreciated using the mid-month convention. Other property i.e fixtures, equipment, etc, are subject to the mid-quarter or half-year conventions.

If you are asking about furn & fixtures, I would consider if each property is owned by different entities/corps/LLc’s or if they are all owned by the same entity. If all are owned by the same entity, I would treat ALL purchases for all properties together. If each property is owned by diff. entities, I would treat on a property by property basis.

I am not a CPA but I do work in the accounting profession. HTH

MikeC

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Applying mid-quarter convention - Posted by Ellen

Posted by Ellen on March 12, 2006 at 13:54:37:

With regard to the mid-quarter convention being applied to depreciable property - If you own multiple rental properties, do you take into consideration ALL purchases from all the properties, or do you apply the mid-quarter convention on a property by property basis, if the costs in the 4th quarter exceeds 40% of the other purchases that year?