Laura's Design Corporation has $400,000 in tax loss carry-forwards.Vandenbosch Investment Consulting,a firm in the 40% tax bracket,would be willing to pay (on a non-discounted basis)the sum of ______________ for the carry-forward alone.

Question

Quizplus · Accepted Answer

Vandenbosch Investment Consulting can use the tax loss carry-forward to offset their taxable income and save 40% of the tax for each dollar of loss used. Therefore, they would be willing to pay $400,000 x 40% = $160,000 for the carry-forward alone.

Laura's Design Corporation Has $400,000 in Tax Loss Carry-Forwards