The correct answer is: A. for business and non-business purpose
Proportionate credit is allowed for capital goods used for both business and non-business purposes. This means that if you purchase a capital good that is used for both business and personal purposes, you can claim a tax credit for the portion of the cost that is attributable to business use.
For example, if you purchase a computer for $1,000 and use it 50% for business and 50% for personal use, you can claim a tax credit of $500.
The amount of the credit is based on the percentage of the capital good’s cost that is attributable to business use. The percentage of business use is determined by the number of hours that the capital good is used for business purposes divided by the total number of hours that the capital good is used.
The maximum amount of the credit is $25,000 per year. The credit is phased out for taxpayers with adjusted gross income (AGI) over $200,000 for single filers and $250,000 for married taxpayers filing jointly.
The credit is available to both individuals and businesses. To claim the credit, you must file Form 3800, General Business Credit, with your tax return.
Here is a brief explanation of each option:
- Option A: For capital goods, proportionate credit is allowed for business and non-business purpose. This is the correct answer.
- Option B: For capital goods, proportionate credit is allowed for business or non-business purpose. This is incorrect because the credit is only allowed for capital goods used for both business and non-business purposes.
- Option C: Both of the above. This is incorrect because only Option A is correct.
- Option D: None of the above. This is incorrect because Option A is correct.