An example of a permanent difference is

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Permanent differences are items that are included in financial income but never in taxable income, or vice versa. All the options listed (proceeds from life insurance on officers, interest expense on money borrowed to invest in municipal bonds, and insurance expense for a life insurance policy on officers) represent examples of permanent differences because they either permanently affect only the financial income or only the taxable income, but not both.

An Example of a Permanent Difference Is