A company had taxable income of $2 million in fiscal 2020 and paid taxes of .7 million; the company incurred a loss of $8 million in fiscal 2021 when the tax rate is 50%. How much refund is the company entitled to?

Question

Quizplus · Accepted Answer

The company paid taxes of $0.7 million in fiscal 2020. With a loss of $8 million in fiscal 2021 and a tax rate of 50%, the company can carry back the loss to offset the taxable income of the previous year, entitling them to a refund of the taxes paid in 2020, which is $0.7 million.

A Company Had Taxable Income of $2 Million in Fiscal