Prior to the effect of tax credits,Clarence's regular income tax liability is $200,000 and his tentative AMT is $180,000.Clarence has nonrefundable business tax credits of $35,000.His tax liability is $165,000.

Question

Quizplus · Accepted Answer

The nonrefundable business tax credits of $35,000 can only reduce the regular tax liability and not the AMT liability. Therefore, Clarence's tax liability cannot be reduced to $165,000.

Prior to the Effect of Tax Credits,Clarence's Regular Income Tax