11.6 Describe income tax methods of depreciation.
half-year convention
Tax rule that requires recognizing six months of depreciation expense on an asset both in the year of purchase and in the year of disposal regardless of the actual purchase date.
property class 3,5,7, and 10
double declining balance method used
property class 27.5, 39
straight line method
Interperiod Tax Allocation
the allocation of income tax between periods whereby there is a recognition of deferred income taxes
property class 15, 20
150% declining balance method
MACRS (Modified Accelerated Cost Recovery System)
(1) a mandated tax life, which is generally shorter than the economic life; (2) cost recovery on an accelerated basis; and (3) an assigned salvage value of zero.
ACRS (Accelerated Cost Recovery System)
a depreciation method under U.S. tax law allowing for the accelerated write-off of property under various classifications