Additional Facts

Assume that a valuation allowance of $100 million is recorded as of December 31, 2018

($150 million DTA less $50 million reversing DTLs

).

Further a

ssume that the Company's projection for 2019 pretax book income of $0 is

accurate, but the Company sells a component of the business and recognizes the

component as a discontinued operation.

The discontinued operations earn $20 million before

tax

, and the continuing operations

lose $20 million before tax for a net pretax book income of $0.

As described above, the Company has a full valuation allowance.

Part 2 Required:

7a.

Is there a tax benefit on the loss of $20 million from continuing operations?

7b.

Is there a tax provision on the $20 million of income from discontinued

operations?