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Oct 17, 2013 at 09:11 PM

Tax Book - Mid Year Convention - Last Year smoothing out

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Hello,

We are using standard M200 (MACRS 3,5,7,10) for depreciation area 10 (Tax book). M200 has period control method 004 pointing to period control 07 - Mid Year.

Example: Asset acquired on May 01, 2013 using calendar year with 7 years life.

During acquisition, the depreciation start is calculated correctly as July, 1 2013. Since the life is 7 yrs, we expect the depreciation to stop at end of June, 2020.

Say depreciation in 2020 is $1200. Asset should depreciate only 6 months in 2020. So monthly depreciation in 2020 should be $200 ($1200 / 6 periods)

However, the asset is depreciating all 12 months with a monthly depreciation of $100 = ($1200 / 12 periods)

Can some one explain why this behavior. We are using standard keys meant for half year convention.