Question
The financial reporting carrying value of Reiss's only depreciable asset exceeded its tax basis by $153,000 at December 31, 2013. This was a result of
The financial reporting carrying value of Reiss's only depreciable asset exceeded its tax basis by $153,000 at December 31, 2013. This was a result of differences between straight-line depreciation for financial reporting purposes and MACRS for tax purposes. The asset was acquired earlier in the year. Reiss has no other temporary differences. The enacted tax rate is 29% for 2013 and 38% thereafter. Reiss should report the deferred tax effect of this difference in its December 31, 2013, balance sheet as: An asset of $59,000. A liability of $58,140. A liability of $59,000. An asset of $58,140.
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