Fores Construction Company reported a pretax operating loss of $240 million for financial reporting purposes in 2016. Contributing to the loss were (a) a penalty of $15 million assessed by the Environmental Protection Agency for violation of a federal law and paid in 2016 and (b) an estimated loss of 30 million from accruing a loss contingency. The loss will be tax deductible when paid in 2017 The enacted tax rate is 40%. There were no temporary differences at the beginning of the year and none originating in 2016 other than those described above. Taxable income in Fores's two previous years of operation was as follows: 2014 $120 million 2015 65 million