A publically traded corporation has $1,000,000 of pretax book income in both 2020 and 2021 before taking into consideration: 1) $2,000 of nondeductivle loybbying expenses incurred in 2020 2) a $10,000 lawsuit filed against it in 2020, which the company's attorneys decided in 2020 that the company had a strong likelihood of losing the case but won't be paid until late 2021 The book/tax difference of 2021 as compared to 2020 is A. 100% temporary B. 83% temporary C. 83% permanent D. 100% permanent

A publically traded corporation has $1,000,000 of pretax book income in both 2020 and 2021 before taking into consideration: 1) $2,000 of nondeductivle loybbying expenses incurred in 2020 2) a $10,000 lawsuit filed against it in 2020, which the company's attorneys decided in 2020 that the company had a strong likelihood of losing the case but won't be paid until late 2021 The book/tax difference of 2021 as compared to 2020 is A. 100% temporary B. 83% temporary C. 83% permanent D. 100% permanent

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter11: Property Dispositions

Section: Chapter Questions

Problem 60P

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