If a company is sitting on losses and it sell one of its division having book value of 200 million for 250 million.
So on a gain of 50 million it’s will be taxed or not.
Please briefly explain why you feel this question should be reported.
Please briefly explain why you feel this answer should be reported.
Please briefly explain why you feel this user should be reported.
It depends upon how much are the actual losses that the company is sitting upon since the selling of a division is an unusual item it is not something which a company does frequently right so if let’s see if the profit is 50 million as you stated and the losses which the company is sitting on us 100 million so if this 50 million will be added to the profit and loss statement then the losses will come to 50 million now which is still a loss that is hundred minus 50 on the other hand if the losses which the company is sitting on are 30 million so what will happen is if 50 million of gain is added to the profit and loss statement then the profit will come to 20 millions which is positive that is Now this overall profit before tax can be taxed so it depends upon the amount of losses on which the company is sitting upon.