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,2017,her business generates an additional $15,000 general business credit.In 2017,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 2017 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:
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In the current year,2017,her business generates an additional $15,000 general business credit.In 2017,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 2017 is available for future years?

Quizplus · Accepted Answer

Molly can utilize up to $20,000 of general business credits for the current year's tax liability. She has carryforward credits of $16,500, which she can utilize in addition to the current year credit of $15,000. Therefore, the total credits available to her for the current year are $31,500. As her tax liability is only $21,500, she can utilize $21,500 worth of general business credits in the current year. Thus, $10,000 of the general business credit generated in 2017 ($15,000-$5,000) remains unused, which can be carried forward for future years. Hence, the answer is C.

Molly Has Generated General Business Credits Over the Years That