Final answer:
The MACRS deduction for the year of disposition is computed differently when utilizing the mid-quarter convention.
Step-by-step explanation:
The MACRS deduction for the year of disposition using the mid-quarter convention is calculated differently compared to other conventions.
When using the mid-quarter convention, if more than 40% of the depreciable property is placed in service during the last quarter of the year, the property is treated as if it were placed in service at the midpoint of that quarter. The mid-quarter convention applies to all property except real estate and certain listed property.
To compute the MACRS deduction for the year of disposition, you will need to use the applicable depreciation method and recovery period, as well as take into account the mid-quarter convention rules specific to the property.