The release of a valuation allowance may relate to a tax planning strategy adopted by the taxpayer that will produce taxable income in the future.

Question

Quizplus · Accepted Answer

The release of a valuation allowance is often related to a change in judgment about the future realization of deferred tax assets, which can include the adoption of a tax planning strategy expected to produce taxable income, thereby making it more likely that the tax benefits of the deferred tax assets will be realized.

The Release of a Valuation Allowance May Relate to a Tax