Caesar Corporation reported income before taxes of $200,000 for the years 2013,2014,and 2015.In 2016 they experienced a loss of $200,000.The company had a tax rate of 25% in 2013 and 2014,and a rate of 35% is 2015 and 2016.Assuming Caesar uses the carryback provisions for the net operating loss,by what amount will the income tax benefit reduce the net loss in 2016?

Question

Quizplus · Accepted Answer

The net operating loss carryback will reduce the income before taxes in 2013 and 2014 by $100,000 each year. The tax savings from this will be $25,000 for each year, or a total of $50,000.

Caesar Corporation Reported Income Before Taxes of $200,000 for the Years