Rules and Regulations

Corporate Income Tax - Lecture 3

This week we will turn our attention to the rules and regulations governing the measurement of taxable income which will allow us to compute taxable income. We will also learn the difference between financial statement income and taxable income. Referring to the Internal revenue code, regulations and court cases will allow us to establish a basis for computing taxable income. You will also learn why tax policy objectives affect the taxable income computation, and the principle of conservatism reflected by GAAP and by the tax law. It is important to also be able to differentiate between a permanent and a temporary box/tax difference and associated tax expense per books and tax payable. Finally, the concept of a net operating loss will be explained and how it reduces taxable income over time. Please review the following YouTube video that will further your understanding of Net Operating Losses. To make the YouTube video larger, click on the [ ] in the lower right corner.
Net Operating Loss Carryback & Carryforward (Tax Refund, Tax Benefit Due, Deferred Tax Asset)