allocated 70% of the responsibility to Columbia ($17.5 million), 20% to Ace Supply ($5.0 million), and 1000 to the plaintiff Mrs. Lee ($2.5 million). Columbia's management is saddened for Mrs. Lee, but they vehemently deny that olumbia's ladder was faulty. The company's position was the ladder defected and it left Columbia's factory containing a clearly marked warning labe that stated, "Do not stand above the second step from the top." However, someone removed the warning label after the ladder left Columbia's factory. Columbia is appealing the decision, but it does not expect the appeals court to hear the case until the Summer of 2019. Thus, the appeals court will most likely not render a decision until late 2019. was not In the meantime, Columbia must deal with the ramifications if the ruling stands. The company does have product liability insurance which will cover up to $ million of the judgment. However, that still leaves a $7.5 million shortfall if the United States Court of Appeals for the 9th Circuit affirms the judgment. Columbia's chief financial officer, Le Ann Swift wants to know the timing amount of any tax deduction relating to the $17.5 million jury award allocated to Columbia, and the impact on the 2018 financial statements. In addition, the award is most likely to create a net operating loss (NOL) in the year in which it is deducted. I need you to research and prepare a memorandum addressing the following in order that Columbia can complete its tax provision and financial statements for the year ended December 31, 2018 1. Whether Columbia can deduct the lawsuit judgment for income purposes? If yes, in what year can it claim the deduction? If the deduction creates a net operating loss, can the loss be carried back and/or carried forward? If yes, to what tax years can the net operating loss be carried