Acai Corporation determined that $5,000,000 of its R&D credit on its current-year tax return was uncertain. Acai determined that there was a 40 percent chance of the credit being sustained on audit. Management made the following assessment of the company's potential tax benefit from the R&D credit and its probability of occurring.
Under ASC 740, what amount of the tax benefit related to the R&D credit can Acai recognize in calculating its income tax provision in the current year?
Definitions:
Lineal Descendants
Direct blood relatives in the direct line of descent, such as children, grandchildren, and great-grandchildren.
Issue
Can denote a problem, question, or matter that is in dispute or needs to be resolved.
Right of Survivorship
A legal principle that ensures property ownership transfer directly to a surviving co-owner or partner without the need for probate upon one's death.
Property Distribution
The division of assets, often occurring in legal contexts such as divorce or estate settlement.
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