No net deferred tax asset $($ie$,$ deferred tax asset net of related valuation allowance$)$ was recognized in the financial statements by

the Choku Company when a loss from discontinued operations was carned forward for tax purposes because it was more likely

than not than none of this deferred tax asset would be realized. Choku had no temporary differences. The tax benefit of the loss

carned forward reduced current taxes payable on year $2$ continuing operations. The year $2$ income statement would include the

tax benefit from the loss brought forward in

A Income from continuing operations

B$.$ Gain or loss from discontinued operations

C$.$ Cumulative effect of accounting changes

D$.$ Extraordinary gains