Final answer:
The federal income tax deduction under ASC 740 that a corporation takes results in a negative book-tax difference, reflecting temporary differences that will reverse over time and affect future tax liabilities or assets.
Step-by-step explanation:
The federal income tax deduction that a corporation takes under ASC 740 is a book-tax difference. The correct answer to the question is b. negative. Under Accounting Standards Codification (ASC) 740, Income Taxes, a temporary difference arises when there's a difference between the tax basis of an asset or liability and its reported amount in the financial statements that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is recovered or settled, respectively.
For example, depreciation expense might be calculated differently for tax purposes than for book purposes. For financial reporting, a company might use straight-line depreciation, while for tax purposes, it might use an accelerated method. This creates a temporary difference between the book and tax values of the asset, and until that difference reverses, the company will record a deferred tax liability or asset to account for the future tax effects.