Question

Problem 12-22 (Algorithmic) (LO. 2)

Oak Corporation holds the following general business credit carryovers:

2015 $12,500 2016 37,500 2017 13,500 2018 41,500 Total carryovers $105,000

Oak’s general business credit generated by 2019 activities equals $84,000 and the total credit allowed during the current year is $150,000 (based on tax liability).

a. Enter the amount (if any) of each year's carryover utilized in 2019.

Year Amount of Carryover Utilized 2015 $ 2016 $ 2017 $ 2018 $ 2019 $

b. What is the amount of any unused credits carried forward to 2020?
$.

Answer 1

Solution:

a) Amount of each year's carryover utilized in 2019:

     2015    -      $12,500

     2016    -      $37,500

     2017    -      $13,500

     2018    -      $41,500

Total   =             $105,000

As the credit allowed in 2019 is $150,000, which means $45,000 ($150,000 - $105,000) is the carryover utilized in 2019.

b) The amount of any unused credits carried forward to 2020 is:

        = $84,000 - $45,000

        = $39,000