Problem 17.035: Calculate tax liability in yr2 An in-place machine with B= $155,000 was depreciated by using Modified Accelerated Cost Recovery System (MACRS) over a 3-year period. The machine was sold for $60,000 at the end of year 2 when the company decided to import the item that required the use of the machine. In year 2, gross income (GI)-$1 million and operating expenses (OE) = $500,000. Determine the tax liability in year 2 if Te-35%. tax liability in year The tax liability in year 2 is determined to be $ Reference links 174 Depreciation Recapture and Capital Gains (Losses)