Collins Company incurs a $1,000 book expense that it deducts on its tax return. The tax law is unclear whether this expense is deductible, so the deduction leads to an uncertain tax position. Assuming a 35% tax rate, the deduction results in a $350 tax benefit. Required: For each of the following independent cases, determine how much of the tax benefit associated with the uncertain tax position Collins can recognize and how much of a tax contingency reserve for uncertain tax benefits Collins needs to record. Case 1 Case 3 80% L Management's assessment of the likelihood of the uncertain tax position being sustained based on technical merits Likelihood of realizing $350 Likelihood of realizing $250 Likelihood of realizing $100 Likelihood of realizing $0 Tax benefit that may be recognized: Largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement Tax contingency reserve for uncertain tax benefits 65% 10% - 30% 20 % Case 2 - 40% 5 % 5% 45 % 45% 400