Deferred Taxes

Question 1

“More Likely Than Not” Criterion

Answer 1

In making the required assessment of the more-likely-than-not criterion:

It shall be presumed that the tax position will be examined by the relevant taxing authority that has full knowledge of all relevant information.

Technical merits of a tax position derive from sources of authorities in the tax law (legislation and statutes, legislative intent, regulations, rulings, and case law) and their applicability to the facts and circumstances of the tax position. When the past administrative practices and precedents of the taxing authority in its dealings with the entity or similar entities are widely understood, for example, by preparers, tax practitioners and auditors, those practices and precedents shall be taken into account.

Each tax position shall be evaluated without consideration of the possibility of offset or aggregation with other positions.

Question 2

“More Likely Than Not” Criterion

Answer 2

Greater than 50% chance taxing authority will agree with your assessment

Question 3

Deferred tax asset

Answer 3

Always based on future deductible amounts x future tax rates

Question 4

Deferred tax liabilities

Answer 4

Always based on future taxable amounts x future tax rates

Question 5

Permanent differences

Answer 5

Examples?

Question 6

Temporary differences

Answer 6

Examples?