Q1. An organization has an asset that is classified as a 1250 property and has a life of 7 years. It establishes a depreciation account for that asset on the basis of MACRS 7 years and the initial cost is $200,000. Without consideration of the sale of this asset, the company's taxable income is $500,000. Determine the following if the asset is sold in 3 years: a. Federal tax liability if the asset is sold for $125,000. b. Federal tax liability if the asset is sold for $35,000