RE:RE:RE:RE:RE:RE:RE:Financial Institution I agrre.
Current Water could use the US$1,000,000 to pay bills, increases salaries, hire more employees, purchase equipment, inventory or divert funds toward research and development, etc.
I agree that the US$1,000,000 is taxable if for that year, Current Water is profitable, but it is also possible that Current Water has deferred tax losses that could be applied towards future profitable years. In the financial statements, there are no indication of deferred taxes losses, but Current Water has lost money four of the past five fiscal years, so it is quite possible that Current Water has deferred tax losses but as not reported it.