Alter Trading purchased a shredding machine for scrap metal for it operations in Mobile, Alabama from Metso Oyi of Finland. Assume the machine cost $6,000,000 and is depreciated as a 5-year asset using MACRS. If the machine is soldduringyear 3 of use, what is the book value (BV) of the machine at the time of sale?

**since the machine is sold during the year and not at the end of the year it does not receive the full depreciation rate in that year. When assets are disposed before the end of the recovery period with MACRS depreciation, the rule is totake one half of the allowable depreciation deduction for that year.