LOL – Income Taxes Case Solution
- The predicted income schedule (awareness analysis above) tasks natural development start in 2012 after stemming the decline in pre-tax book income.
- A postponed tax property awareness analysis revealing pre-tax book income forecasts (Handout 2).
- The Company does not have a history of operating losses or tax credit carryforwards ending unused.
- LOL draft income declaration and excerpt from tax footnote since December 31, 2010 (Handout 1).
- LOL does not have the capability to carryback any losses to previous durations.
- The Company has actually recognized the following possible tax-planning methods:.
o Selling and renting back producing devices that would lead to a taxable gain of $20 million.
o Selling the main production center at a gain to balance out current capital loss carryforwards.
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