Molly has generated general business credits over the years that have not been utilized. The amounts generated and not utilized follow:
$\begin{array}{rr}
2010 & \$ 2,500 \
2011 & 7,500 \
2012 & 5,000 \
2013 & 4,000
\end{array}$
In the current year, 2014, her business generates an additional $15,000 general business credit. In 2014, based on her tax liability before credits, she can utilize a general business credit of up to $20,000. After utilizing the carryforwards and the current year credits, how much of the general business credit generated in 2014 is available for future years?

Question

Quizplus · Accepted Answer

The general business credit carryforward is limited to the amount of tax liability before credits. In this case, the tax liability before credits is $20,000. Molly has $19,000 of carryforward credits ($2,500 + $7,500 + $5,000 + $4,000) and $15,000 of current year credits. This totals $34,000. Since she can only utilize $20,000 of credits, $14,000 of the 2014 credits are available for future years.

Molly Has Generated General Business Credits Over the Years That 2010$2,50020117,50020125,00020134,000\begin{array}{rr}2010 & \$ 2,500 \\2011 & 7,500 \\2012 & 5,000 \\2013 & 4,000\end{array}2010201120122013​$2,5007,5005,0004,000​

Molly Has Generated General Business Credits Over the Years That $\begin{array}{rr}2010 & \$ 2,500 \\2011 & 7,500 \\2012 & 5,000 \\2013 & 4,000\end{array}$