The date is November 15, 2020. You are the new controller for Engineered Solutions. The company treasurer, Randy Patey, believes that as a result of pending legislation, the currently enacted 40% income tax rate may be decreased for 2021 to 25% and is uncertain which tax rate to apply in determining deferred taxes for 2020. Patey also is uncertain which temporary differences should be included in that determination and has solicited your help. Your accounting group provided you the following information. Two items are relevant to the decisions. One is the $50,000 insurance premium the company pays annually for the CEO's life insurance policy, for which the company is the beneficiary. The second is that Engineered Solutions purchased a building on January 1, 2019, for $6,000,000. The building's estimated useful life is 30 years from the date of purchase, with no salvage value. Depreciation is computed using the straight-line method for financial reporting purposes and the MACRS method for tax purposes. As a result, the building's tax basis is $5,200,000 at December 31, 2020. Write a memo to Patey that: 1. Identifies the objectives of accounting for income taxes. 2. Differentiates temporary differences and permanent differences. 3. Explains which tax rate to use. 4. Calculates the deferred tax liability as of December 31, 2020.