In 2017, Phoenix Corporation acquires a new research facility and hires several scientists to develop new products. No new products are developed until 2018, although the following expenditures were incurred:

Laboratory materials ………………………………………………………….....................….$ 40,000

Research salaries ………………………………………………………………............................ 80,000

Overhead attributable to the research facility ………………………………….............30,000

R&E equipment placed into service (5-year MACRS recovery period) ………..100,000

Total ……………………………………………………………………………................................$250,000

a. What are Phoenix Corporation’s deductions for R&E expenditures in 2017 and 2018 if the expensing method is elected?

b. How would your answer to Part a change if the deferral and amortization method were elected and the amortization period were 60 months?