Angela, who is single, incurs circulation expenditures of $270,000 during 2018. She is deciding whether to deduct the entire $270,000 or to capitalize the expenses and deduct them over a three-year period.

Angela is in the 37% bracket for regular income tax purposes this year; she reports regular taxable income of $1,200,000 before considering the circulation expenses. Angela expects to be in the 37% regular tax bracket in 2019 and 2020.

If an answer is zero enter "0". If required, round tax computations to two decimal places and then round your final answer to the nearest dollar.

a. If Angela deducts the entire $270,000 in 2018, she will have a positive AMT adjustment of $............ in 2018 and negative adjustments of $............ in 2019 and $............ in 2020.

b. If Angela elects to capitalize the circulation expenses and deduct them over a three-year period, the AMT adjustment is $............ for each year.

c. If Angela deducts the $270,000 in 2018, 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 tax savings each of the three years will be $............

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 $............