Process of computing taxable income for GAAP corporation
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What is the process for computing a corporation's taxable income, assuming the corporation must use Generally Accepted Accounting Principles (GAAP) to determine financial income? How might this differ for corporations not required to use GAAP?
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Solution Summary
In three short paragraphs totaling 176 words, the solution explains the process of reporting the differences between financial income and taxable income.
Update: In response to a student comment, a short paragraph has been added to explain differences for non-GAAP reporting.
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The 'process' you are referring to is the reconciliation between GAAP net income and taxable net income. It is quite transparent in a corporate tax return because the balance sheet and the income statement (page 4 and page 1, respectively, of a Form 1120 report on the basis of GAAP. In that regard, the tax return will generally ...
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