Question

jackson corporation has accumulated minimum tax credits of $475,000 from tax years prior to 2019. required: if 2019 regular tax before credits is $210,000 and jackson qualifies for general business credits of $13,000, calculate its allowable minimum tax credit for 2019

Answer 1

Jackson Corporation's allowable minimum tax credit for 2019 is $197,000.

Step-by-step explanation:

To calculate the allowable minimum tax credit for Jackson Corporation for 2019, you need to determine the regular tax before credits and apply the general business credits. Here are the steps:

1. Start with the regular tax before credits of $210,000.
2. Subtract the general business credits of $13,000 from the regular tax before credits: $210,000 - $13,000 = $197,000.
3. Compare the result to the accumulated minimum tax credits from previous years ($475,000). If the result is less than or equal to the accumulated credits, then the allowable minimum tax credit is the same as the regular tax before credits: $197,000.
4. If the result is greater than the accumulated credits, then the allowable minimum tax credit is the accumulated credits: $475,000.

Therefore, Jackson Corporation's allowable minimum tax credit for 2019 is $197,000.