Question 65 (1 point) A corporation is selling an existing asset for $1,700. The asset, when purchased, cost $10,000 was being depreciated under MACRS using a five-year recovery period from the table below, and has been depreciated for four full years. If the assumed tax rate is 40 percent on ordinary income and capital gains, the tax effect of this transaction is MACRS RATE Recovery year 3 years 5 years 7 years 10 years il 334 209 149 10% 32 2 1) $O tax liability 2) $840 tax liability 3) $3,160 tax liability