XYZ Company (XYZ) had $20,000 in income before security gains each year. XYZ - U.S. GAAP Year 1 Year 2 Year 3 Year 4 Income before gains Unrealized gain - Mitchell stock Recognized gain - Mitchell stock Income before income taxes Current and deferred tax expense Net income XYZ - Tax Year 1 Year 2 Year 3 Year 4 Income before gains Unrealized gain - Mitchell stock Recognized gain - Mitchell stock Taxable income