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Under ASC 740, when is a valuation allowance for a deferred tax asset required?

At year-end, a company carries a DTL of $126 related to accelerated tax depreciation that is scheduled to reverse entirely next year. During the current year, tax legislation is enacted that increases the statutory tax rate to 25% effective next year. What remeasurement effect, if any, should be recognized in the current period’s income tax expense?

Which item generally constitutes negative evidence in evaluating the need for a valuation allowance under ASC 740?

Computational — §351 Comprehensive (NUMERIC only) Facts: A transfers equipment (AB $120; FMV $220) with a liability 150. B transfers land (AB $300; FMV $260) and cash 40. The corporation issues only voting common stock to each founder; B also receives cash 30. Liabilities are bona fide; no services. (a) §351 applies? Enter 1 if YES, 0 if NO: [a] (b1) A’s recognized gain under §357(c): [b1] (b2) B’s recognized gain (boot-limited):  [b2] (c1) A’s stock basis after the exchange: [c1] (c2) B’s stock basis after the exchange: [c2] (d1) Corporation’s basis in A’s equipment: [d1] (d2) Corporation’s basis in B’s land: [d2]

A current-year NOL of $260 carries forward indefinitely but is subject to the 80% limitation. Under ASC 740, how is the deferred item recorded (ignore any valuation allowance)?

A founder contributes business property (AB $50; FMV $90) and asks the corporation to assume a $30 personal credit-card balance unrelated to the business. How is that liability treated for §351 purposes?

When should deferred tax assets and liabilities be remeasured for the effects of a tax law or rate change?

Computational — Corporate Operations (NUMERIC only; CC → DRD) Facts: TI before CC/DRD/NOL = 1,480; CC paid = 210; dividends received = 520 from a 22%-owned domestic corporation; no NOLs. Apply 10% CC limit and §243 rates with ordering CC → DRD. (a1) DRD percentage (enter 50, 65, or 100):  [a1] (a2) DRD amount: [a2] (a3) Does the DRD taxable-income limitation bind? Enter 1 if YES, 0 if NO: [a3] (b1) Allowable current-year CC deduction: [b1] (b2) CC carryforward (if any): [b2] (c) Final taxable income: [c]

Two individuals plan to form a consulting corporation. Person A contributes appreciated property for stock and would own 79% immediately after. Person B receives stock solely for services and would own 21% immediately after. No other property contributors participate. What is the §351 outcome for A’s transfer?

A corporation reports $10,000 of tax‑exempt municipal bond interest in its financial statements. How is this item reflected on Schedule M‑1 when reconciling book income to taxable income?