JG Corporation incurred a tax loss of $945,000.Based on a tax rate of 38%,what is the potential tax benefit?

Question

Quizplus · Accepted Answer

The potential tax benefit can be calculated by multiplying the tax loss by the tax rate: $945,000 x 38% = $359,100. Therefore, the correct answer is C, $359,100. Option A is incorrect because there is a tax benefit since the company can use the tax loss to reduce its taxable income. Option B is incorrect because the tax benefit is not equal to the tax loss, it is a percentage of it. Option D is incorrect because the information provided is sufficient to determine the potential tax benefit.

JG Corporation Incurred a Tax Loss of $945,000