To compute taxable income a corporation starts with book income before income tax expense and makes book$-$to$-$tax adjustments for items that are accounted for differently for book and tax purposes. The end result is taxable income. Note that if a corporation is not required to $($and chooses not to$)$ use GAAP for book purposes the corporation could use tax accounting methods to determine book and taxable income. In these situations, the corporation would not report any book$-$tax differences.

JDog Corporation owns stock in Oscar Inc. valued at $$2,000,000$ at the beginning of the year and $$2,200,000$ at year$-$end. JDog received a $$10,000$ dividend from Oscar Inc. What temporary book$$tax differences associated with its ownership in Oscar stock will JDog report for the year in the following alternative scenarios $($income difference only$$ignore the dividends$-$received deduction$)?$

a$.$ JDog owns $5$ percent of the Oscar Inc. stock. Oscar's income for the year was $$500,000.$

b$.$ JDog owns $40$ percent of the Oscar Inc. stock. Oscar's income for the year was $$500,000.$