Question

In 2017, Krause Corp’s financial statement showed accrued losses on disposal of unused plant facilities of $3,600,000. The facilities were sold in December 2018 and a $3,600,000 loss was recognized for tax purposes then. Also in 2018, Krause Corp’s paid $150,000 for a two-year life insurance policy for their CEO Krause, and the company was the beneficiary. Assuming that the enacted tax rate is 35% in both 2017 and 2018, and that Krause paid $1,170,000 in income taxes in 2017.

Trump enacted the tax cut and job act in 2018 and effectively changed the corporate tax rate to 21%. For Krause’s quarterly financial statement on March 2018, how would this change in tax rate impact Krause’s net deferred income taxes? Show me your calculation.

Answer 1

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SIandarsd - setting body based London, The IAs were epace rd in 2001 by inteonational financicu seporting Standonds. (IF RS) 3600000 + 150000 XQ1% 3760000 xa1% : $ 787500 Tax Peud 6 $ 1- 170000 would not have any Tooc This change is not countes intéttive as the decoea se în Tas Sare would lead to less Payment e6 tax in the futerse ym