What amount of income tax expense should the bank report


First Bank has some question as to the tax-free nature of $5.70 million of its municipal bond portfolio. This amount is excluded from First Bank's taxable income of $56.20 million. Management has determined that there is a 65% chance that the tax-free status of this interest can't withstand scrutiny of taxing authorities.

Assuming a 35% tax rate, what amount of income tax expense should the bank report?

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Accounting Basics: What amount of income tax expense should the bank report
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