GI (250k) - Depreciation (34,850) = Taxable income 215,150. 1 mil year 1 - 34,850 (1016(a)(2)) = AB 965,150 Taxable income 250k (GI) - Depreciation (36,360) [1 mil x .03636] TI = 213,640. Percentages come from IRS tables. AB = 965,150 - 36,360 = 928,790.