If Oak’s general business credit generated by 2017 activities equals $36,000 and

Question

If Oak’s general business credit generated by 2017 activities equals $36,000 and the total credit allowed during the current year is $60,000 (based on tax liability), what amounts of the current general business credit and carryovers are utilized against the 2017 income tax liability? What is the amount of unused credit carried forward to 2018

Please answer the question using the following chart:

Thank you.

12-23 Oak Corporation holds the following general business credit carryovers 2013 $5,000 2014 $15,000 2015 $6,000 2016 $19,000 Total carryovers $45,000

If Oak’s general business credit generated by 2017 activities equals $36,000 and the total credit allowed during the current year is $60,000 (based on tax liability), what amounts of the current general business credit and carryovers are utilized against the 2017 income tax liability? What is the amount of unused credit carried forward to 2018

Please answer the question using the following chart:

2017 General Business credit                                  Total credit allowed (based on tax liability) Less utilization of carryovers on FIFO basis     2013     2014     2015     2016 Remaining credit Applied against     2017 General Business credit     2017 unused amount carried forward to 2018

Thank you.

Explanation / Answer

2017 General Business credit = $ 36000

Total credit allowed (based on tax liability) = $ 60000

  Less utilization of carryovers on FIFO basis

   2013 $ 5000

   2014 $ 15000

   2015 $ 6000

   2016 $ 19000

  Remaining credit $15000 ($ 60000 - $ 45000)

     Applied against

      2017 General Business credit $ 15000

      2017 unused amount carried forward to 2018 = $ 21000 ($ 36000 - $ 15000 )

UNUSED AMOUNT CAN BE CARRIED FORWARD FOR UP TO 20 YEARS

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