38. What book–tax 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 book–tax 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

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

c. Year 1 Year 2 Capital gains $ 0 $50,000 Capital losses 25,000 30,000

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

e. Answer for year 6 only.

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

f. Answer for year 7 only.
Year 1 Years 2–6 Year 7 Capital gains $ 0 $
0 $15,000 Capital losses 10,000 0 0