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FIN_48_acceleration_of_deductions - sustained is the...

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FIN 48 – Acceleration of deductions Crowell Company acquires an intangible asset with an indefinite life (thus not amortizable for financial statement purposes) in the current year for $30 million. The Company decides to deduct the entire amount of the intangible asset in its current year tax return based on ambiguity in the tax code. However, Crowell’s management does not believe the tax position will more likely than not be sustained under tax authority scrutiny. Rather, they believe that the position that will more likely than not be
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Unformatted text preview: sustained is the amortization of the intangible asset over a 15-year period. The Company believes that any resolution with the tax authorities concerning the position taken would not occur within one year of the balance sheet date. The Company’s tax rate is 40%. Crowell’s taxable income before considering the intangible asset is $100,000,000. Required : Prepare the journal entry (or entries) to record Crowell’s income taxes for the year....
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