T11F-Chp-14-5-Schedule-M-Items -...

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b4f6e9bd67fe2e9b570d93d95d2f04a2a9088d3e.xls CORPORATE BOOK-TAX DIFFERENCES. Book income may differ from taxable income for a large number of transactions. Some of these differences are permanent. Permanent differences A. Some book income is never taxed for regular tax (AMT not relevant here). Examples: 1 Tax-exempt interest received on state and municipal obligations 2 Proceeds of life insurance carried by the corporation on the lives of key officers or employees B. Some book expenses are never deductible for tax purposes. Examples: 1 Expenses incurred in earning tax-exempt interest 2 Premiums paid for life insurance carried by corporation on lives of key officers or employees 3 Fines and expenses resulting from a violation of law 4 Disallowed travel and entertainment costs 5 Political contributions 6 Federal income taxes per books, which is based on GAAP (SFAS No. 109) C. Some tax deductions are never taken for book purposes. Examples: 1 The dividends-received deduction 2 The U.S. production activities deduction
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