Question

Weston Corporation has accumulated minimum tax credits of $134,000 from tax years prior to 2018. If 2018 regular tax before credits is $47,000 and Jackson qualifies for general business credits of $14,000, its allowable minimum tax credit for 2018 is:

A) $134,000

B) $47,000

C) $83,500

D) $100,000

Answer 1

In this question information about MAT tax liability is not available for the year 2018.

but credit for MAT before 2018 is available i.e $ 134000.

MAT stands for minimum alternative tax that minimum tax liability that will pay by taxpayer.

Net tax liability for weston Corporation is $ 47000

So as per provision of act minimum tax cerdit shall be $ 47000.

there is minimum tax liability for 2018 so minimum tax credit for 2018 shall be $ 47000.

so the answer is Option A. i.e $ 47000.