Angela, who is single, incurs circulation expenditures of $270,000 during 2021. She is deciding whether to deduct the entire $270,000 or to capitalize the expenses and deduct them over a three-year period.

Angela is in the 37% bracket for regular tax purposes this year; she reports regular taxable income of $1,200,000 before considering the circulation expenses and has no AMT adjustments other than the circulation expenditures. Angela expects to be in the highest regular tax bracket in 2022 and 2023 as well. Advise Angela on how to treat the expenditures in 2021. Take the time value of money into consideration when calculating the tax savings of one alternative over another. Use the tables in Appendix E for this purpose, and assume that the pertinent discount rate is 4%.