Question

Federal income tax expense reported on a corporation's books generates a temporary book-tax difference for Schedule M-3 purposes.

A) True
B) False

Answer 1

False. Federal income tax expense reported on a corporation's books does not generate a temporary book-tax difference for Schedule M-3 purposes.

Step-by-step explanation:

False. Federal income tax expense reported on a corporation's books does not generate a temporary book-tax difference for Schedule M-3 purposes. The temporary book-tax difference arises when there is a difference between the financial statement income reported by the corporation and the taxable income reported for tax purposes.