Angela, who is single, incurs circulation expenditures of $153,000 during 2017. She is deciding whether to deduct the entire $153,000 or to capitalize it and elect to deduct it over a three-year period.

Angela knows that she will be subject to the AMT for 2017 at both the 26% and 28% rates. Angela is in the 28% bracket for regular income tax purposes this year; she reports regular taxable income of $153,000 before considering the circulation expenses. Angela expects to be in the 28% regular tax bracket in 2018 and 2019.

c. If Angela deducts the $153,000 in 2017, her total tax savings over the three years will be $_________. Ignoring the time value of money, if she elects to capitalize the circulation expenses, her total tax savings over the three years will be $._________($42,480)

Assume a discount rate of 4%. The present value factors at 4% are: Year 1: 1.00000; Year 2: 0.92456 and Year 3: 0.88900. If she elects to capitalize the circulation expenses, her total tax savings over the three years will be $.________.