39. An unfavorable temporary book/tax difference generates a deferred tax asset. True False 40. Bolton Inc., a calendar year taxpayer, generated a $296,400 net operating loss this year. Bolton can carry the loss back five years and forward 20 years for tax purposes. True False perates a business as a sole oprietorship. This year his net profit was $10,570. For tax pr purposes this amount should be reported on: A. Schedule C, Statement of Profit or Loss from Business B. The first page of Form 1040 as other income C. A separate tax return prepared for the business operation D. Schedule E, Statement of Rent and Royalty Income 42. Which of the following statements regarding sole proprietorships is false? A. A sole proprietorship has no legal identity separate from that of its owner. B. Sole proprietorships are the most common form of business entity in the U.S. C. The cash flow generated by a sole proprietorship belongs to the owner