Modeling drill: build the DTL schedule for PP&E step-up 80, tax rate 30%, useful life 10 years. What is DTL balance and tax expense effect in years 1, 5, 10?

Initial DTL is 80 x 30% = 24. The book step-up depreciates 8 per year over 10 years. If there is no tax basis step-up, the temporary difference reverses by 8 per year, and the DTL reverses by 8 x 30% = 2.4 per year. DTL balance is 21.6 after year 1, 12.0 after year 5, and 0 after year 10. Deferred tax benefit from reversal is 2.4 per year, offsetting part of book tax expense.