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Deferred Income Tax

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    #1

    Deferred Income Tax

    The tax effect of Book-to-tax differences are supposed to be presented on the balance sheet as "Deferred" (or Prepaid) Income Taxes. This is according to GAAP.

    What if there are book-to-tax differences for a corporation who has elected Subchapter S? Since there IS no taxes (or tax rate), how is the deferral shown on the balance sheet? Or is the deferral shown at all??
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    #2
    Originally posted by Nashville View Post
    The tax effect of Book-to-tax differences are supposed to be presented on the balance sheet as "Deferred" (or Prepaid) Income Taxes. This is according to GAAP.

    What if there are book-to-tax differences for a corporation who has elected Subchapter S? Since there IS no taxes (or tax rate), how is the deferral shown on the balance sheet? Or is the deferral shown at all??
    Since the income tax is not a liability of the corporation, it should not show on the books.

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