R4 - Differences Between Book & Tax Flashcards
1
Q
Permanent Diff: Items of income/expenses that are recognized for book but never for tax or vice versa
A
- Dividends Received Deduction
- Tax-Exempt Interest
- Life Insurance Proceeds
- Tax-Exempt Investment Expenses
- Charitable Contributions Expired C/Os
- Meals (50%)
- Life insurance expense (corp)
- Penalties
- Entertainment
- Political Expense
- Federal Income Taxes
2
Q
Temporary Diff: Items of income/expenses that are recognized in one period for book but in a different period for tax.
A
- Advanced rents/royalties
- Installment Sales
- Charitable Contributions (unexpired)
- Depreciaton (tax vs book)
- Bad Debt (tax: write offs; GAAP: allowance)
3
Q
Bad Debts
A
Only written off amounts can be deducted on the tax return
4
Q
Other Addbacks
A
+ Allowance for doubtful accounts
+ Warranty Accrual
5
Q
Other Deductions
A
+ Bad debt Write offs
+ Actual Warranty Costs
