taxable income
Taxable income: The memo should be submitted in the form of a Microsoft Word document, using only the template provided. The Relevant Facts, Specific Issues, and Conclusions sections of the memo should be thorough but concise. The key portion of the memo will be the Support section, which should be properly supported by appropriate regulation citations (be specific with section, number, paragraph, and subparagraph as applicable).
As this is a memo, and not a formal writing assignment, APA format is not required. Furthermore, there is no need to submit a title page or research page. Just substitute “Your Firm” at the top of the memo with your full name.
Prepare (in good form) a research memorandum to the file.
SCENARIO: Altidore Inc. operates a calendar-year-end business that suffers from dramatic seasonal variation in taxable income. For example, it often operates at a net loss for the first two quarters of the year and then operates profitably for the last two quarters and, for as long as anyone can remember, finishes the year with taxable income. The new tax director has been asked to help calculate the deferred tax assets at the end of the first quarter. After looking at the quarterly loss, he claims that since there is no net income, there are no deferred tax assets because the effective tax rate is zero. (Carrybacks and carryforwards are not allowed in this jurisdiction.) Is the tax director correct in his assessment of the effective tax rate for calculating the deferred tax assets?
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The variation in taxable income in Altidore Inc is brought about by lack of calculation of deferred taxes in all quarters of the financial years. The company suffers from variation in taxable income because it fails to recognize the taxes as liabilities. At the end of the first quarter, a director is asked to calculate the deferred tax assets…………………………..
APA
586 words
