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 a total of $40,000 in general business credit in the current year (2012). She has carryforwards from previous years that have not been utilized, but the amount is not given. Therefore, we can assume that she has used all of the carryforwards from previous years and is only left with the current year credit of $30,000.

Since she can only utilize $40,000 in total for the current year, she will use up all of her credits. This means that there will be no general business credits available for future years. Therefore, the answer is (C) $28,000, which means that none of the general business credit generated in 2012 will be available for future years.

Molly Has Generated General Business Credits Over the Years That