Sondgeroth Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes. (assume the carryback provision is used for a net operating loss.)
year Pretax Income(loss) Tax rate
2009 $110,000 34%
2010 90,000 34%
2011 (260,000) 38%
2012 220,000 38%
The tax rates listed were all enacted by the beginning of 2009.