No deferred tax asset was recognized in the Year $1$ financial statements by the Chaise Company when a loss from

discontinued segments was carried forward for tax purposes. Chaise had no temporary differences. The tax benefit of the

loss carried forward reduced current taxes payable on Year $2$ continuing operations.

The Year $2$ financial statements would include the tax benefit from the loss brought forward in

Owners' equity.

Income from continuing operations.

Cumulative effect of accounting changes.

Gain or loss from discontinued segments.

THE ANSWER IS NOT GAIN OR LOSS FROM DISCONTINUED SEGMENTS