How are book and tax differences presented in corporate tax
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How are book and tax differences presented in corporate tax reports.
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Your response is 288 words in everyday language suitable for a novice. Two sample journal entries are given to illustrate the concept.
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Book income, or GAAP income, is based on financing reporting rules. Tax income is based on IRS rules. So, the differences between GAAP and Tax rules create differences. These differences can be temporary or permanent.
Temporary means that the timing of the revenue or expenses differs between GAAP and the IRS rules but the total amount will eventually be the same in both. Like with depreciation, for instance, where it might be deducted more quickly for taxes and eventually the full cost will be ...
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