[harris016]

Can anybody help me understand why paying more depreciation for income tax purposes results in a deferred liability for the company. It seems to me like the company is paying the taxes early, before the expense is recognized on their books, and would therefor end up being an asset as they are paying before recognizing it on their books. Thanks in advance

[MrCPA511]

harris016: it really just depends on the actual item. In your post, you basically explained it yourself for those 2 items. Non taxable bond interest is non taxable, so it shouldn't count towards your taxable income (subtract). Long term loss accrual in excess of deductible amount is allowed for financial purposes, but not for tax purposes. So in this case, you add it back to your taxable income to increase the income back.

FAR - 86 7/2014
AUD - 95 10/2014
REG - 87 1/22/15
BEC - 84 7/2015

[harris016]

Mr CPA thank you!

[harris016]

Mr CPA thank you!

[Author]

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