general_business_credit_solution

general_business_credit_solution - that may be carried back...

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Solution : General business credit Part 1 : Talon Corporation’s general business credit for the current year is $70,000. Talon’s net income tax is $150,000, tentative minimum tax is $130,000, and net regular tax liability is $150,000. Talon has no other tax credits. Required : Compute Talon’s general business credit for the current tax year. Talon’s general business credit for the year is limited to $20,000, determined as follows: Net income tax $150,000 Less: The greater of: $130,000 (tentative minimum tax) $31,250 [25% × ($150,000 – $25,000)] (130,000) Amount of general business credit allowed $20,000 Note: Talon then has $50,000 ($70,000 – $20,000) of unused general business credits
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Unformatted text preview: that may be carried back or forward. Part 2 : Falcon Corporations general business credit for the current year is $85,000. Falcons net regular tax liability is $107,000, and its tentative minimum tax is $88,000. Required : Compute Falcons general business credit for the current tax year. Falcons general business credit for the year is limited to $19,000, determined as follows: Net income tax $107,000 Less: The greater of: $88,000 (tentative minimum tax) $20,500 [25% ($107,000 $25,000)] (88,000) Amount of general business credit allowed $19,000 Note: Falcon then has $660,000 ($85,000 $19,000) of unused general business credits that may be carried back or forward....
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This note was uploaded on 09/09/2011 for the course TAX 6845 taught by Professor Kelliher,c during the Fall '08 term at University of Central Florida.

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