The records for Tiger Corp. show these data for 2016:

• Financial income before tax is $945,000.
• Interest of $12,000 was received from a municipal bond investment.
• Tiger introduced a new employee stock option plan in 2016. Compensation expense related to the plan for 2016 totaled $145,000. The plan has a three-year service period.
• Life insurance premiums of $16,000 were paid on key officers of the company.
• Tiger received $600,000 in cash on July 1, 2016 for renting its excess office space for a period of 2.5 year, starting July 1, 2016. For IRS purposes the full amount was taxed in the year the cash was received.
• Machinery was acquired in January 2014 for $400,000. Straight-line depreciation over a five year life (no residual value) is used for book purposes. For IRS purposes, MACRS depreciation is calculated under the following schedule:
  • Year 1 40%
  • Year 2 35%
  • Year 3 15%
  • Year 4 10%
  • Year 5 0%
• Tiger received $50,000 in dividend income as a result of equity investments in other corporations, only 20% of the dividends are subject to taxation.
• The statutory tax rate is 35%.

Required:

1. With financial income before taxes as a starting point, compute taxable income. Determine if each book/tax difference is temporary or permanent.

2. Prepare the journal entry to record income taxes for 2016.

3. What is the current portion of income tax expense?