Assume that Todd Company's realized gain is also $60,000 for financial reporting purposes (i.e., there was no difference between Todd's book and tax basis in the land). For financial reporting purposes, however, Todd Company included all of the gain in income in the year of sale.

What are the book-tax differences in each of years 24? In addition, identify whether the difference is temporary (TEMP) or permanent (PERM) and whether the difference is favorable (FAV) or unfavorable (UNF). Year 1 solutions have been provided.

	Year 1	Year 2	Year 3	Year 4
B-T Diff.	($45,000)	a)	b)	c)
TEMP/PERM	TEMP	d)	e)	f)
FAV/UNF	FAV	g)	h)	i)