The Celluloid Collar Corporation has $360,000 in tax loss carryforwards. The Bowstring Shirt Company, a firm in the 30% tax bracket, would be willing to pay (on a nondiscounted basis) the sum of ______________ for the carryforward alone.

Question

Quizplus · Accepted Answer

The tax loss carryforward can be used to offset taxable income, reducing taxes by 30% of $360,000, which equals $108,000.

The Celluloid Collar Corporation Has $360,000 in Tax Loss Carryforwards