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Uncertain Tax Positions: Accounting for Income Tax—And Why it Matters to Both Individual and Business Investors  

Author:  Michael F.  Lynch.; David J.  Beausejou.; David B.  Casten.

Source: Volume 28, Number 04, Summer 2011 , pp.73-89(17)

Journal of Taxation of Investments

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When evaluating the after-tax benefits or costs of an investment, taxpayers and their advisors need to consider not only the relevant tax law but the related accounting for income tax—even for those taxpayers who do not prepare financial statements—because all investment decisions require an analysis of the investor’s income tax cost. This article sets out the issues involved, explains the differences between tax and financial accounting, and provides a framework for the application of financial accounting and tax rules to an investor’s particular set of facts.

Keywords: accounting for income taxes, deferred taxes, temporary and permanent differences

Affiliations:  1: Bryant University ; 2: Bryant University ; 3: Boston University School of Law Graduate Tax Program.

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