A company had taxable income of $2 million in fiscal 2020 and paid taxes of 0.6 million; the company incurred a loss of $7 million in fiscal 2021 when the tax rate is 50%. How much refund is the company entitled to?

Question

Quizplus · Accepted Answer

The company paid taxes of $0.6 million in fiscal 2020 on its taxable income. With a loss of $7 million in fiscal 2021 and a tax rate of 50%, it can carry back the loss to offset the previous year's taxable income, entitling it to a refund of the taxes paid, which is $0.6 million.

A Company Had Taxable Income of $2 Million in Fiscal