Example: A US domestic corporation reports pretax income and taxable income of $1 million, which includes a tax deduction of $100,000. The corporations tax rate is 21% (ignore state taxes). The corporations legal team has determined that it is more likely than not that the tax position will be sustained upon audit; however, the tax benefit realized may be less than the current savings. The potential benefits and realized probabilities are below. What amount of the tax benefit should be recognized in the financial statements? Record the journal entry.

Estimated Tax Benefit	Individual Probability	Cumulative Probability
$21,000	25%	25%
$16,000	30%	55%
$10,000	35%	90%
$0	10%	100%