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aimtobeacpa
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Joined: 10 Dec 2009
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Posted: 06 Jul 2010 at 01:25 \| IP Logged

given dep in financial statements was 8000 more than tax dep.

8000 is added to pretax accounting income bec latter income amt reflects 8000 more dep than should be reflected in taxable income.

can anyone explain this?

why is it added to pretax income and not subtracted?

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tetsuwangatomu
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Posted: 31 Oct 2010 at 04:29 \| IP Logged

Pretax income = Financial (book) Income (Included the $8,000 deduction already)

To arrive at Taxable Income, then

Financial Income + $8,000=Taxable Income

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