Prior to the effect of tax credits,Brent's regular income tax liability is $145,000 and his tentative AMT is $120,000.Brent has nonrefundable business tax credits of $32,000.Brent's tax liability is $113,000.

Question

Quizplus · Accepted Answer

The question does not indicate whether the tax credits can be applied to both regular income tax liability and tentative AMT. Assuming the credits can only be applied to regular income tax liability, Brent's tax liability before tax credits would be the sum of regular income tax liability and tentative AMT, which is $265,000. Subtracting the tax credits of $32,000 would result in a tax liability of $233,000, which is higher than the given tax liability of $113,000.

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