What income is reported

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Question - Rio Properties Corporation reported the following results for its first three years of operations:

2019 income (before income taxes) $ 40,000

2020 loss (before income taxes) (360,000)

2021 income (before income taxes) 400,000

There were no permanent or reversible differences during these three years. Assume an income tax rate of 30% for 2019 and 2020, and 35% for 2021, and that any deferred tax asset recognized is more likely than not to be realized.

Required - If Rio Properties elects to use the carryforward provisions and not the carryback provisions, what income (loss) is reported for 2020?

Reference no: EM132573196

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