Molly has generated general business credits over the years that have not been utilized.The amounts generated and not utilized follow:
2012
$2,500
2013
7,500
2014
5,000
2015
4,000

In the current year,2016,her business generates an additional $15,000 general business credit.In 2016,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 2016 is available for future years?

Question

Molly has generated general business credits over the years that have not been utilized.The amounts generated and not utilized follow:
2012
$2,500
2013
7,500
2014
5,000
2015
4,000
​
In the current year,2016,her business generates an additional $15,000 general business credit.In 2016,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 2016 is available for future years?

Quizplus · Accepted Answer

Molly can utilize the carryforward credits of $19,000 ($2,500 + $7,500 + $5,000 + $4,000) and the current year credit of $15,000, for a total of $34,000 in general business credits. However, since her maximum credit utilization is $20,000, she can only use $20,000 of the available credits, leaving $14,000 ($34,000 - $20,000) as carryforward credits for future years. Therefore, the answer is C)$14,000.

Molly Has Generated General Business Credits Over the Years That