If a corporation's cash charitable contributions exceed the charitable contribution deduction limit, what kind of book-tax difference is created for that year?
A)Permanent; favorable.
B)Permanent; unfavorable.
C)Temporary; favorable.
D)Temporary; unfavorable.

Question

Quizplus · Accepted Answer

Temporary; unfavorable. When a corporation's cash charitable contributions exceed the deduction limit, the excess can be carried forward and deducted in future years, creating a temporary difference. Initially, this results in higher taxable income compared to book income, making it an unfavorable difference.

If a Corporation's Cash Charitable Contributions Exceed the Charitable Contribution