What book-tax difference in year 1 and year 2 associated with its capital gains and losses would ABD Inc. report in the following alternative scenarios? I dentify each book-tax differences as favorable or unfavorable and as permanent or trmporal. (Leave no answer blank. Enter aero if applicable.)

Year 1 Year 2

Capital gains 0 $40,000

Capital losses 25,000 0

Book-tax difference Favorable or Unfavorable Temporal or Permanent

Year 1

Year 2