Question: Maris Corporation put into service 100 000 of equipment that
Maris Corporation put into service $ 100,000 of equipment that qualifies for its state’s 10 percent research credit. To the extent that the credit is claimed, no cost-recovery deductions are allowed. Maris is subject to a 14 percent cost of capital. If the credit were not claimed, the property would qualify for cost-recovery deductions using a three-year life, straight line with no salvage value, and a half-year convention. The state has a flat income tax rate of 8 percent. What is the net value of the tax credit to Maris Corporation?
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