Question: What is the difference between permanent and temporary book-tax differences?

What is the difference between permanent and temporary book-tax differences?

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Permanent booktax differences arise from items that are income or deductions during the year for either book purposes or for tax purposes but not both Permanent differences do not reverse over time so over the long run the total amount of income or deductions for the items is different for book and tax purposes In contrast temporary booktax differences are those booktax differences that reverse over time such that over the longterm corporations recognize the same amount of income or deductions for the items on their financial statements as they recognize on their tax returns Temporary booktax differences arise because the income or deduction ... View full answer

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