Warren Company has taken a position in its tax return to claim a tax credit of $30 million (direct reduction in taxes payable) and has determined that its sustainability is "more likely than not," based on its technical merits. The tax credit would be a direct reduction in current taxes payable. Warren believes the likelihood that a $30 million, $18 million, or $6 million tax benefit will be sustained is 25%, 30%, and 45%, respectively. Warren's taxable income is $255 million for the year. Its effective tax rate is 40%. Warren's income tax expense for the year is?
A) $12 million.
B) $72 million.
C) $84 million.
D) $102 million.
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Home » Business » Warren Company has taken a position in its tax return to claim a tax credit of $30 million (direct reduction in taxes payable) and has determined that its sustainability is "more likely than not," based on its technical merits.