Question

B12 Corporation is currently in the sixth year of its existence (2022). In 2017-2021, it reported the following income and (losses) (befor: net operating loss carryovers or carrybacks) Required: a. What is B12's 2022 taxable income after the NOL deduction (assume it does not elect to forgo any cairybacks, if applicable)? b. What is its 2022 book-tax difference associated with its NOL? is it favorable or unfavorable? Is it permanent or temporary? Complete this question by entering your answers in the tabs below. a. What is B12's 2022 taxable income after the NOL deduction (assume it does not elect to forgo any carrybacks, if applicablel? b. What is its 2022 book-tax difference associated with its NOL? Is it favorable or unfavorable? Is it permanent or temporary? Complete this question by entering your answers in the tabs below. What is B12's 2022 taxable income after the NOL deduction (assume it does not elect to forgo any carrybacks, if applicable)? 0. What is B12's 2022 taxable income after the NOL deduction (assume it does not elect to forgo any carrybacks, if applicable) b. What is its 2022 book-tax difference associated with its NOL? Is it favorable or unfavorable? Is it permanent or temporary? Complete this question by entering your answers in the tabs below. What is its 2022 book-tax difference associated with its NOL? Is it favorable or unfavorable? Is it permanent or temporary?

Answer 1

a. B12's 2022 taxable income after the NOL deduction is not provided in the given information, and additional details are required to calculate it.

b. The information needed to determine B12's 2022 book-tax difference associated with its NOL, whether it is favorable or unfavorable, and whether it is permanent or temporary is not provided. Further details are required for accurate analysis.

Step-by-step explanation:

a. The information necessary to calculate B12's 2022 taxable income after the NOL deduction is not provided in the question. The taxable income would depend on the specific NOL deduction and other relevant details.

b. Similarly, details about the book-tax difference associated with the NOL, whether it is favorable or unfavorable, and whether it is permanent or temporary are not provided. A thorough analysis requires information about the nature of the NOL and its impact on book and tax accounting.

To provide accurate answers, more specific information about the NOL deduction, applicable carrybacks, and other relevant details is needed.

Answer 2

a. To calculate B12 Corporation's 2022 taxable income after the Net Operating Loss (NOL) deduction, subtract the NOL carryover from the 2022 income before NOL deduction.

Given Income (Loss) Before NOL Deduction:

2017: $(50,000)

2018: $30,000

2019: $(20,000)

2020: $40,000

2021: $(60,000)

Total Income (Loss) Before NOL Deduction = $(50,000) + $30,000 - $(20,000) + $40,000 - $(60,000) = $(60,000)

If the NOL carryover is $80,000, deduct this from the 2022 income before NOL deduction:

2022 Taxable Income After NOL Deduction = Income Before NOL Deduction - NOL Carryover

2022 Taxable Income After NOL Deduction = $(60,000) - $80,000 = $0

b. The 2022 book-tax difference associated with the NOL is favorable and temporary. It's favorable because it reduces taxable income to zero, resulting in no tax liability. It's temporary because the NOL deduction impacts taxes for the current year but will not carry forward or backward after the NOL amount is fully utilized.