TPW, a calendar year taxpayer, sold land with a $541,000 tax basis for $780,000 in February. The purchaser paid $81,000 cash at closing and gave TPW an interest-bearing note for the $699,000 remaining price. In August, TPW received a $57,850 payment from the purchaser consisting of a $34,950 principal payment and a $22,900 interest payment. Assume that TPW uses the installment sale method of accounting.

1)Compute the difference between TPW's book and tax income resulting from the installment sale method.

2)Using a 21 percent tax rate, compute PTR's deferred tax asset or liability (identify which) resulting from the book/tax difference.