Molly has generated general business credits over the years that have not been utilized.The amounts generated and not utilized follow: In the current year,2012,her business generates an additional $30,000 general business credit.In 2012,based on her tax liability before credits,she can utilize a general business credit of up to $40,000.After utilizing the carryforwards and the current year credits,how much of the general business credit generated in 2012 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:  In the current year,2012,her business generates an additional $30,000 general business credit.In 2012,based on her tax liability before credits,she can utilize a general business credit of up to $40,000.After utilizing the carryforwards and the current year credits,how much of the general business credit generated in 2012 is available for future years?

Quizplus · Accepted Answer

Molly can utilize up to $40,000 of general business credit in 2012. She has unused carryforwards of $35,000, which she can use along with the current year credit of $30,000, making the total available credit $65,000. However, since she can only utilize up to $40,000, the remaining $25,000 of credit will be carried forward to future years. Therefore, the amount of general business credit generated in 2012 that is available for future years is $28,000 ($30,000 generated in 2012 minus $2,000 leftover from the $40,000 limit and $25,000 carried forward).

Molly Has Generated General Business Credits Over the Years That