The best-of-half-year-mid-quarter depreciation convention in DCAF selects the optimal MACRS convention between the half-year and mid-quarter options. This conflicts with IRS guidance, which instructs that the "40% rule" should be used to determine the depreciation convention. This depends on other assets being depreciated by the owner, so there is insufficient information provided as inputs to DCAF to determine which convention is appropriate. If DCAF is to align with IRS guidance, the user should have to run the calculation themselves and input the correct convention option.
The applicable IRS guidance is available at https://www.irs.gov/instructions/i4562#en_US_2025_publink1000309321.
The
best-of-half-year-mid-quarterdepreciation convention in DCAF selects the optimal MACRS convention between the half-year and mid-quarter options. This conflicts with IRS guidance, which instructs that the "40% rule" should be used to determine the depreciation convention. This depends on other assets being depreciated by the owner, so there is insufficient information provided as inputs to DCAF to determine which convention is appropriate. If DCAF is to align with IRS guidance, the user should have to run the calculation themselves and input the correct convention option.The applicable IRS guidance is available at https://www.irs.gov/instructions/i4562#en_US_2025_publink1000309321.