Bracket for regular income tax purposes

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Angela, who is single, incurs circulation expenditures of $153,000 during 2014. She is in the process of deciding whether to expense the $153,000 or to capitalize it and elect to deduct it over a three-year period. Angela already knows that she will be subject to the AMT for 2014 at both the 26% and the 28% rates.

Angela is in the 28% bracket for regular income tax purposes this year (she records regular taxable income of $153,000 before considering the circulation expenses). She expects to be in the 28% bracket in 2015 and 2016.

Advise Angela on whether she should elect the three-year write-off rather than expensing the $153,000 in 2014.

Reference no: EM13755051

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