I want to use fifteen year, straight line, mid-month convention on some land improvements (sewers, parking lot, driveway,etc on nonresidential real property). My tax preparer and my Turbo Tax for Business are fighting against the use of mid-month and want to use half year. There is no disagreement on the fifteen year or the use of straight line. I pointed out that Publication 946 clearly states that real property should use the mid-month convention and this works out nicely for me in the short tax year. The tax preparer says there is no table for fifteen year mid-month so they go to Chart 1 and use half year or sometimes mid-quarter. I say the heading on Chart 1 says use Chart 2 for real property. They say there is no fifteen year in Chart 2. I say so you calculate which is easy for mid-month. I phoned the IRS business depreciation group and the lady with 22 years experience wanted to use the table from Chart
- After digesting my argument and spending many minutes reading the tax code, she stated she could not understand the inconsistency. When queried about a possible typographical error she stated the wording had been the same "forever". I am puzzled that tax software after a decade would be incorrect on a frequently used tax step and am doubtful about the expertise of my out of state tax preparer. Of course the problem may be in my inability to read the IRS publications correctly.
-- Jim Chapman