During the 2020 taxable year, Leasing Corp. (a "C" corporation all of the stock of which was owned throughout the year by the same four individuals) purchased computer equipment which it then leased to unrelated third parties. During 2020, Leasing Corp. had ten full-time employees, three of whom devoted 100% of their time to the leasing activities engaged in by Leasing Corp. Leasing Corp. had total gross receipts for the year 2020 equal to $27,000,000 and $14,000,000 of this amount was attributable to its 25 leasing transactions.

On January 1, 2020, Computer A1001 was purchased for $3,000,000. LEASING Corp. paid $250,000 in cash for the computer and executed a non-recourse note in the amount of $2,750,000 for the balance of the purchase price. In 2020 and 2021 depreciation relating to Computer A1001 was equal to $500,000 per year. Assume that all other income and expenses related to Computer A1001 for the years 2020 and 2021 netted to zero.

In answering the questions below disregard any application of the passive activity loss rules.

(a) What part of the $500,000 of annual depreciation may LEASING deduct for the years 2020 and 2021? Fully explain your answer.

(b) If Leasing Corp's total gross receipts for 2020 had been $31,000,000 instead of $27,000,000 how might that affect your answer to part (a), above.