Exercise 14-16 Determining tax benefit for uncertain tax position (L014-10) 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 21% tax rate, the deduction results in a $210 uncertain 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 2 101 Case 3 80% 65 Management's assessment of the likelihood of the uncertain tax position being sustained based on technical merits Likelihood of realizing 5210 Likelihood of realizing 5150 Likelihood of realizing 560 Likelihood of realizing 50 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 10 301 201 401 5 5% 451 55% 25 % 15% 5 % 45 $ 0 $ 210 s 210 5