At December 31,2015,the Rare Corporation reported a $40,000 deferred tax liability pertaining to a $100,000 temporary difference which will reverse equally during the next four years.On December 31,2015,after determining the deferred tax liability,Rare's management was informed that the income tax rate for years subsequent to 2015 had been changed to 42%.As a result of the tax rate change,Rare's 2015 income tax expense will

A) not change.
B) increase $800.
C) increase $2,000.
D) increase $1,200.

Deferred Tax Liability

A tax obligation that a company will have to pay in the future, arising out of current transactions that are recognized in the financial statements before they are taxable.

Tax Rate Change

An adjustment in the percentage at which an individual or corporation is taxed, affecting the computation of tax liabilities and net income.

Temporary Difference

A difference between the book value and tax value of an asset or liability that will result in taxable or deductible amounts in future years.