8. LO.8 Jill is the CFO of Portech, Inc. Portech’s tax advisers have recommended two tax planning ideas that each will provide $5,000,000 of current-year cash tax savings.

One idea is based on a timing difference and is expected to reverse in full 10 years in the future. The other idea creates a permanent difference that never will reverse.

Determine whether these ideas will allow Portech to reduce its reported book income tax expense for the current year. Illustrate in a table or timeline your preference for one planning strategy over the other. Which idea will you recommend to Jill?