During the year, Green, Inc., incurs the following research expenditures: Green's qualifying research expenditures for the year are:

Question

During the year, Green, Inc., incurs the following research expenditures:  Green's qualifying research expenditures for the year are:

Quizplus · Accepted Answer

Green's qualifying research expenditures are the total amount of research expenses minus the expenses related to the development of products intended for sale. Therefore, the qualifying research expenditures are $100,000 - $20,000 = $80,000. However, the base amount for calculating the research credit is only 75% of the qualifying research expenditures, which is $60,000. The incremental credit percentage is 20%, which is multiplied by the excess of the qualifying research expenditures over the base amount, which is $80,000 - $60,000 = $20,000. Therefore, the total research credit is $60,000 + ($20,000 x 20%) = $64,000.

During the Year, Green, Inc