Determine Tom incremental research activities credit

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Problem - Tom, a calendar year taxpayer, informs you that during the year, he incurs expenditures of $40,000 that qualify for the incremental research activities credit. In addition, Tom's research-credit base amount for the year is $32,800.

Required -

a. Determine Tom's incremental research activities credit for the year.

b. Tom is in the 24% tax bracket. Determine which approach to the research expenditures and the research activities credit (other than capitalization and subsequent amortization) would provide the greater tax benefit.

Reference no: EM132669609

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