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