The Celluloid Collar Corporation has $360,000 in tax loss carry-forwards.The Bowstring Shirt Company,a firm in the 30% tax bracket,would be willing to pay (on a non-discounted basis)the sum of ______________ for the carry-forward alone.

Question

Quizplus · Accepted Answer

The tax loss carry-forward can be used to offset future taxable income, reducing taxes by 30% of the carry-forward amount. Therefore, $360,000 * 30% = $108,000.

The Celluloid Collar Corporation Has $360,000 in Tax Loss Carry-Forwards