what is the possible tax implication?

Q: What is meant by a tax shelter?

A: Tax shelter is a provision for tax payer to deduct the taxable income. This provision gives certain…

Q: What distinguishes an income tax from other taxes?

A: A tax is a governmental entity's required financial charge or other kind of levy put on a taxpayer…

Q: What types of income should not be classified as such on a tax return? Why shouldn't they be…

A: Answer Nontaxable income won’t be taxed, whether or not you enter it on your tax return. nontaxable…

Q: How do the tax laws and financial accounting standards differ?

A: Financial Reporting:   Financial reporting is the process of disclosing the financial results of the…

Q: What is meant by “tax allocation within a period”? What is the justification for such practice?

A: Tax: Tax refers to a compulsory payment or a contribution to the state revenue, levied by the…

Q: What is the logic behind allowing tax loss carrybacks/carryforwards?

A: Logic behind allowing tax loss carrybacks and carryforwards: A tax loss carryback permits a company…

Q: Income tax is least likely to impact on the resultant entitlement

A: Entitlement:Distribution or automatic exercise of a contractually or legally granted absolute…

Q: What’s the difference between marginal and average tax rates?

A: The taxes are the government source of income from the general public. The tax rate are the…

Q: What is a deferred tax asset and how is the value created?

A: Deferred tax asset: When Income Tax Expense account is more than the Income Tax Payable account,…

Q: What is the valuation allowance for deffered tax asset

A: Deferred tax asset(DTA) arises due to payment of higher tax in current year due to the variance…

Q: How is tax accounting different from financial accounting?

A: Accounting: It can be defined as the process of summarizing and recording the company’s financial…

Q: the difference between “tax evasion”, “tax avoidance”, and “tax planning”.

A: The differences for terms tax evasion,tax avoidance and tax planning are shown below