What Confidence Level Must Management Have That a Tax Position

question 72

Multiple Choice

What confidence level must management have that a tax position will be sustained on audit before it can recognize any portion of the related deferred tax asset under ASC 740?

• A)More likely than not.
• B)Reasonable basis.
• C)Substantial authority.
• D)Probable.

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Definitions:

Dual Federalism

A concept of federalism where federal and state governments are seen as co-equal sovereigns, operating independently and with powers that are clearly delineated.

Layer Cake

Often used as a metaphor to describe a clear, well-defined separation of powers or responsibilities, especially in federal systems.

Marble Cake

Metaphorically used in federalism to describe a government system where state, local, and federal powers are intertwined and not clearly distinguished.

Devil's Food Cake

A moist, airy, rich chocolate cake that is one of the most popular American cake varieties.