Terrance Inc.,a calendar year taxpayer,purchased used equipment for $2,765,000 and placed it in service on March 4,2019.The equipment was seven-year recovery property and was the only depreciable asset that Terrance purchased during 2019 (assume no election for Section 179 expense and no Bonus Depreciation taken).
a.Compute Terrance's tax depreciation with respect to the equipment for 2019 and 2020.
b.Compute Terrance's adjusted basis in the equipment on December 31,2020.

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The Answer of Terrance Inc.,a calendar year taxpayer,purchased used equipment for $2,765,000 and placed it in service on March 4,2019.The equipment was seven-year recovery property and was the only depreciable asset that Terrance purchased during 2019 (assume no election for Section 179 expense and no Bonus Depreciation taken).
a.Compute Terrance's tax depreciation with respect to the equipment for 2019 and 2020.
b.Compute Terrance's adjusted basis in the equipment on December 31,2020.