Federal income tax expense reported on a corporation's books generates a temporary book-tax difference for Schedule M-3 purposes.
Federal income tax expense generates a permanent book-tax difference for Schedule M-3 purposes.

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Federal income tax expense reported on a corporation's books generates a temporary book-tax difference for Schedule M-3 purposes, not a permanent one. This is because the timing of the recognition of expenses for tax purposes may differ from the timing of the recognition of expenses for book purposes. Additionally, the amount of the expense may also differ due to differences in tax laws and financial reporting standards.

Federal Income Tax Expense Reported on a Corporation's Books Generates