Weston Corporation has accumulated minimum tax credits of $134,000 from tax years prior to 2018. If 2018 regular tax before credits is $47,000 and Jackson qualifies for general business credits of $14,000, its allowable minimum tax credit for 2018 is:

Question

Quizplus · Accepted Answer

The allowable minimum tax credit for 2018 is the greater of the tentative minimum tax for 2018 ($47,000) or the sum of the minimum tax credits available from prior years ($134,000) reduced by the amount of general business credits claimed for the year ($14,000).

Therefore, the calculation would be (tentative minimum tax of $47,000 is greater than the reduced amount of prior-year minimum tax credits of $120,000):

Allowable minimum tax credit = $47,000

Weston Corporation Has Accumulated Minimum Tax Credits of $134,000 from Tax