Question: Charger Corp has 500 000 of income from continuing operations
Charger Corp. has $ 500,000 of income from continuing operations and $ 300,000 of income from discontinued operations. In the prior year, Charger finished the year with a $ 1.2 million net operating loss that was attributable to losses generated from what is now the discontinued operations and determined that a full valuation allowance was required. In the current year, Charger has determined that no valuation allowance is required based on current-year income and future income projections in excess of $ 700,000. Assuming a 40 percent tax rate, how should the total tax expense going be allocated between continuing operations and discontinued operations in the current year?
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