Final answer:
The correct convention for depreciating real property is the Half-year convention. This convention assumes that the property is placed in service at the midpoint of the tax year, and applies to all types of property, including buildings and land.
Step-by-step explanation:
Answer:
The correct convention for depreciating real property is the Half-year convention. This means that the property is assumed to be placed in service at the mid-point of the tax year, regardless of the actual date it was acquired.
Under the Half-year convention, the property is depreciated over a period of time that extends over more than one tax year. This convention applies to all types of property, including real property such as buildings and land.
To illustrate this, let's say a building was acquired on May 1. Under the Half-year convention, it would be assumed that the building was placed in service on July 1, which is the midpoint of the tax year. The depreciation would then be calculated based on this mid-point date, rather than the actual acquisition date.