Why would a valuation allowance be required

Reference no: EM133608055

Problem: You learn that Jetex sold a portion of their business in Idaho at a loss of $64,000 in 2022. Jetex does not have a history of operating losses or tax credit carryforwards expiring unused. The Company has identified the following possible tax-planning strategies: Capitalize for tax purposes rather than deducting immediately certain publishing costs. Selling and leasing back manufacturing equipment that would result in a taxable gain of $24,000. In your professional opinion would a valuation allowance be required? Why or why not?

Reference no: EM133608055

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