Dix, Inc., a calendar-year corporation, reported the following
operating income (loss) before income tax for its first three
years of operations:
Year 1 $100,000
Year 2 (200,000)
Year 3 400,000
There are no permanent or temporary differences between operating
income (loss) for financial and income tax reporting purposes.
When filing its year 2 tax return, Dix did not elect to
forego the carryback of its loss for year 2. Assume a 40% tax rate
for all years. What amount should Dix report as its income tax
liability at December 31, year 3?