Assuming that separate income tax returns are being filed, what deferred income tax asset is created?
A) $ 0.
B) $ 360.
C) $ 450.
D) $2,250.
E) $3,600.

Question

Quizplus · Accepted Answer

Assuming separate income tax returns are being filed, only Bob can claim the $1,800 loss on his tax return. This loss will create a deferred tax asset for Bob, which he can use to offset future taxable income. The deferred tax asset will be equal to the loss ($1,800) multiplied by the tax rate (25%) which gives us $450. Therefore, the correct answer is C.

Assuming That Separate Income Tax Returns Are Being Filed, What