Balm, Inc., has a general business credit for 2014 of $90,000. Balm's regular income tax liability before credits is $140,000, and its tentative AMT is $132,000.

a. Calculate the amount of general business credit Balm can use in 2014, and calculate its general business credit carryback and carryforward, if any.

b. Balm projects a $140,000 regular 2015 income tax liability. Its tentative AMT will be $132,000. Balm is considering making an investment early in 2015 that annually will produce $45,000 of tax-exempt income. Balm is trying to decide between two alternatives. The first alternative is a tax-exempt bond that is a 2004 private activity bond.

The second alternative is a tax-exempt bond that is not a private activity bond. Advise Balm on the preferable investment.