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MWC Corp. is currently in the sixth year of its existence (2018). In 20132017, it reported the following income and (losses) (before net operating loss
MWC Corp. is currently in the sixth year of its existence (2018). In 20132017, it reported the following income and (losses) (before net operating loss carryovers or carrybacks).
| 2013: | $ | (74,000 | ) |
| 2014: | (18,250 | ) | |
| 2015: | 50,000 | ||
| 2016: | 161,000 | ||
| 2017: | (35,000 | ) | |
| 2018: | 402,500 | ||
a. If MWC elected to carry over the 2017 NOL, what is its 2018 taxable income after the NOL deduction?
b. What is its 2018 book-tax difference associated with its NOL? Is it favorable or unfavorable? Is it permanent or temporary?
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