Mr.W's tax liability for the year was $85,000 before claiming a general business tax credit.During the year, Mr.W qualified for $100,000 of general business credits.The general business credit allowed for the year is

Question

Quizplus · Accepted Answer

The general business credit allowed for the year cannot exceed the taxpayer's tax liability before claiming the credit. Therefore, Mr.W's general business credit is limited to his tax liability of $85,000. The excess $15,000 of general business credits cannot be carried back or carried forward to other tax years. Hence, the maximum general business credit allowed for the year is $85,000.

MrW's Tax Liability for the Year Was $85,000 Before Claiming