Prior to the effect of tax credits,Eunice's regular income tax liability is $325,000 and her tentative AMT is $312,000.Eunice has general business credits available of $20,000.Calculate Eunice's tax liability after tax credits.
A)$0
B)$305,000
C)$312,000
D)$325,000
E)None of these

Question

Quizplus · Accepted Answer

Eunice's regular income tax liability after tax credits is $305,000 ($325,000 - $20,000).Her tentative AMT is $312,000,since the general business credit is not permitted in calculating tentative AMT.Because a taxpayer may claim the general business credit only to the extent his or her regular income tax liability exceeds tentative AMT,Eunice's tax liability is $312,000 rather than $305,000.

Prior to the Effect of Tax Credits,Eunice's Regular Income Tax