Alpha Company reported positive net income in Year 1 and Year 2 before sustaining a significant loss in Year 3. All of the Year 3 loss can be carried back against the income of Years 1 and 2 for purposes of determining the company's Year 3 income tax liability. How should the carryback be presented int he company's Year 3 financial statements?

options: 1) As an income-tax benefit that reduces the operating loss on the income statement.

2) As an extraordinary item called "Extraordinary Income Tax Benefit."

3) As the correction of an error in the retained earnings statement.

4) As a revenue from operations in the income statement.