Carlson's general business credit (before limitations) for the current year is $158,150. His net income tax is $347,930, tentative minimum tax is $313,137, and net regular tax liability is $330,534. He reports no other Federal income tax credits for the year. Compute Carlson's general business credit allowed for the year, and any amounts that can be carried back and forward

Carlson's general business credit allowed for the year = 123,357 USD

Explanation:

Let's first arrange the data given:

Business Credit for the current year = 158,150 USD

Net Income Tax = 347,930 USD

TMT = Tentative Maximum Tax = 313,137 USD

Net Regular Tax liability = 330,534 USD

Solution:

330,534 - 25000 = 305,534

305,534 x 25% = 76,383.5

TMT 313,137 > 76,383.3

So,

Net income tax - TMT = 347,930 - 313,137

Net income tax - TMT = 34,793

Now, the current Carlson's general business credit allowed for the year will be :

Current Business Credit - 34,793

158,150 - 34,793 = 123,357 USD

Carlson's general business credit allowed for the year = 123,357 USD

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