Reference no: EM132443237

Loss Carryback and Carryforward

The Oraclecorporation has made $250,000 before taxes during each of the last 15 years, and it expects to make $250,000 a year before taxes in the future. However, in 2013 the firm incurred a loss of $650,000. The firm will claim a tax credit at the time it files its 2013 income tax return, and it will receive a check from the U.S. Treasury. Show how it calculates this credit, and then indicate the firm's tax liability for each of the next 5 years. Assume a 40% tax rate on all income to ease the calculations. Enter your answers as positive values. If an amount is zero, enter "0".

    Prior Years      2011       2012

    Profit earned $              $ 

    Carry-back credit          $              $ 

    Adjusted profit             $              $ 

    Tax previously paid (40%)         $              $ 

    Tax refund: Taxes previously paid        $              $ 

    Total check from U.S. Treasury   = 

Firm's tax liability

2014:    $ 

2015:    $ 

2016:    $ 

2017:    $ 

2018:    $  

Pleas show how I would work this problem