Question

Carlson's general business credit for the current year is $143,200. his net income tax is $315,040, tentative minimum tax is $283,536, and net regular tax liability is $299,288. he has no other federal income tax credits. determine carlson's general business credit allowed for the year, and any amounts that can be carried back and forward. if required, round your computations to the nearest dollar.

What is Carlson's general business credit allowed for the year?
A) $143,200
B) $299,288
C) $315,040

Answer 1

Carlson's general business credit allowed for the year is $143,200. The correct option is (A).

Step-by-step explanation:

In this case, Carlson's general business credit allowed for the year is $143,200. This means that Carlson can apply a credit of $143,200 against his net income tax liability.

However, since his tentative minimum tax is $283,536 and his net regular tax liability is $299,288, Carlson can only use the general business credit to reduce his net regular tax liability, up to the amount of the credit. Therefore, Carlson's general business credit allowed for the year is $143,200.