Final answer:
The statement regarding the 7.5 months of cost recovery for property placed in service in the second quarter, when 40% of the value is placed in the last quarter, is false.
Step-by-step explanation:
The statement that if more than 40% of the value of property, other than real property, is placed in service during the last quarter, all of the property placed in service in the second quarter will be allowed 7.5 months of cost recovery is false. Under the Modified Accelerated Cost Recovery System (MACRS), a mid-quarter convention may apply when more than 40% of personal property (not including real property) is placed in service in the last quarter of the tax year. This convention specifies different depreciation periods depending on which quarter the asset was placed in service. If the mid-quarter convention applies, property placed in service during the second quarter would be allowed for a different depreciation period, not necessarily 7.5 months.
also known as depreciation, is determined by the specific rules and guidelines set by the Internal Revenue Service (IRS). The percentage of property placed in service during a specific quarter does not impact the cost recovery period for property placed in service in another quarter.