180-Day Rule
Under the Income Tax Act, an asset put to use for 180 days or more in the year of acquisition gets a full year's depreciation rate; an asset put to use for less than 180 days gets only half that rate.
The 180-day rule only applies to tax depreciation under Section 32 — it has no equivalent restriction under Schedule II, where depreciation is typically pro-rated by the number of days the asset was actually in use during the year.
Getting the put-to-use date wrong, or misapplying the 180-day threshold, is a common source of tax depreciation errors and a frequent audit adjustment.
How AssetIQ helps
AssetIQ's Depreciation & Compliance Agent applies the 180-day rule automatically based on each asset's recorded put-to-use date, and flags borderline cases for review before they become an audit finding.
See the Depreciation & Compliance Agent →