Are deferred taxes an unfair loophole that must be closed?What are the specific concerns that have been expressed over the years and do you see the rules surrounding deferred taxes changing in the future?

A deferred income tax liability is a liability reported on a balance sheet as a result of a…

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Are deferred taxes an unfair loophole that must be closed? What are the specific concerns that have been

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter1: An Introduction To Taxation And Understanding The Federal Tax Law

Section: Chapter Questions

Problem 34DQ

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Question

Are deferred taxes an unfair loophole that must be closed?
What are the specific concerns that have been expressed over the years and do you see the rules surrounding deferred taxes changing in the future?

Definition Definition Estimated future tax made while preparing accounts. Deferred tax is estimated based on past and present transactions from financial statements. It is not the actual tax that needs to be paid or is refundable from the revenue authority; it is an accounting entry. It is necessary to account for deferred tax due to difference between accounting profits and taxable profits.

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