BTW Corporation has taxable income in the current year that can be offset with an NOL carryover from a previous year. What is the nature of the book-tax difference created by the net operating loss carryover deduction in the current year?
A)Permanent; favorable.
B)Permanent; unfavorable.
C)Temporary; favorable.
D)Temporary; unfavorable.

Question

Quizplus · Accepted Answer

The book-tax difference created by the net operating loss carryover deduction in the current year is temporary because it will reverse in future years when the NOL carryover is used up. The nature of the difference is favorable because it reduces taxable income and therefore reduces current tax liability.

BTW Corporation Has Taxable Income in the Current Year That