A tax planning opportunity is an action an entity must take to create or increase taxable income in a period before the expiration of a tax loss or tax credit carry forward. Examples of tax planning are:

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■Asset swap- Selling an asset that generates nontaxable income and using the funds to buy another asset that generates taxable income.

■Asset sale- Selling an asset that has appreciated, and for which the tax base has not been adjusted to reflect the appreciation. A variation on this approach is sale and leaseback transactions.

■Deduction deferral- Delaying the recognition of some deductions from taxable profit that can be deferred.

■Recognition basis- Electing to recognize interest income for the calculation of taxable profit on either a received or receivable basis.