Question

Which of the following, if any, correctly describes the research activities credit?

a.         The research activities credit is the greater of the incremental research credit, the basic research credit, or the energy research credit.

b.         If the full research activities credit is claimed for a taxable year, the research and experimentation expenditures on which that credit is computed will not be fully deductible in that year.

c.         The credit is not available for research conducted in Puerto Rico.

d.         Personal service corporations qualify for the basic research credit.

e.         The energy research credit is allowed only for in-house expenses incurred in a corporation manufacturing solar or wind energy equipment.

Answer 1

Which of the following, if any, correctly describes the research activities credit?

a.         The research activities credit is the greater of the incremental research credit, the basic research credit, or the energy research credit.

b.         If the full research activities credit is claimed for a taxable year, the research and experimentation expenditures on which that credit is computed will not be fully deductible in that year.

c.         The credit is not available for research conducted in Puerto Rico.

d.         Personal service corporations qualify for the basic research credit.

e.         The energy research credit is allowed only for in-house expenses incurred in a corporation manufacturing solar or wind energy equipment.

The anwer is "b" as it is correctly described the research activity credit as "The Research Activities Credit allows businesses and eligible entities to offset funds invested in certain research-related expenses through a reduction in their federal taxes." it is realated to reduction in tax and deductable expenditure.