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expense differs from income tax liability. The tax expense is determined under GAAP. The income tax liability is determined under the Internal Revenue Code. Some of these differences are temporary and reverse over time. Others are permanent and do not reverse.
Asset
Asset
Liability
Other items
*$1,200,000 $1,100,000
Sum the various deferred tax assets and liabilities classified as non-current:
If net result is an asset, report as long-term asset If net result is a liability, report as long-term liability
NOL for each tax year is computed. The NOL of one year can be applied to offset taxable income of other years, possibly resulting in tax refunds NOLs can be:
carried back 2 years and carried forward 20 years (carryback option), or carried forward 20 years (carryforward only)
2004
NOL 2004
2005
2006
2007 2024
Apply first
2053
2006
2007
2024
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