Merrill Lynch (a financial advising company) is planning to…
Merrill Lynch (a financial advising company) is planning to hire 800 employees in Year 1. It is a calendar year taxpayer. For those employees, it purchased a computer and desk for each employee’s office (so 800 of each item in total) on March 15, Year 1. The 800 computers cost $2,750,000 in total and the 800 desks cost $3,000,000 in total. Merrill Lynch’s policy is to fully capitalize these costs and depreciate the costs under regular MACRS depreciation.Fill in the blank: If Merrill Lynch purchased no other business assets during Year 1 and opts out of Sec. 179 and bonus depreciation, it will have _____________ total depreciation for the computers in Year 1.Answer: