What booktax differences in year 1 and year 2 associated with its capital gains and losses would ABD Inc. report in the following alternative scenarios? Identify each booktax difference as favorable or unfavorable and as permanent or temporary.

A.

Year 1

Year 2

Capital gains

$

20,000

$

5,000

Capital losses

8,000

0

Book tax difference Favorable or Unfav Temp or permanent

Year 1

Year 2

b.

		Year 1		Year 2
Capital gains	$	8,000	$	5,000
Capital losses		20,000		0

Book tax difference Favorable or Unfav Temp or permanent

Year 1

Year 2

c.

Year 1

Year 2

Capital gains

$

0

$

50,000

Capital losses

25,000

30,000

Book tax difference Favorable or Unfav Temp or permanent

Year 1

Year 2

d.

		Year 1		Year 2
Capital gains	$	0	$	40,000
Capital losses		25,000		0

Book tax difference Favorable or Unfav Temp or permanent

Year 1

Year 2

e. Answer for year 6 only.

				Years
		Year 1		2 - 5		Year 6
Capital gains	$	0	$	0	$	15,000
Capital losses		10,000		0		0

Book tax difference Favorable or Unfav Temp or permanent

Year 1

Year 2

f. Answer for year 7 only.

				Years
		Year 1		2 - 6		Year 7
Capital gains	$	0	$	0	$	15,000
Capital losses		10,000		0		0
Book tax difference Favorable or Unfav Temp or permanent Year 1 Year 2