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Fins, Inc. expects that its tax returns will reflect total income tax expense of $1,000,000 for the year. In making that determination, Fins included a
Fins, Inc. expects that its tax returns will reflect total income tax expense of $1,000,000 for the year. In making that determination, Fins included a $200,000 deduction for which they believe there is a 45% chance of being upheld if challenged by the taxing authority. If Fins' deduction were challenged, they believe they would receive no deduction at all. Assuming Fins tax rate is 25 percent, what will it report as its current tax expense in its financial statements?
A. $1,000,000
B. $1,050,000
C. $950,000
D. $900,000
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