Fedora, a calendar year taxpayer, informs you that during the year she incurs expenditures of $61,000 that qualify for the incremental research activities credit. In addition, Fedoras research-credit base amount for the year is $50,200.

a. Enter Fedora's incremental research activities credit for the year: $.

b. Fedora 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 to Fedora.

If required, round your computations to the nearest dollar. Use rounded amounts in subsequent calculations.

Total tax benefit of Choice 1 - Reduce the deduction by 100% of the credit and claim the full credit: $ Total tax benefit of Choice 2 - Claim the full deduction, and reduce the credit by the product of 100% of the credit times 21%: $ Therefore, Fedora should select Choice 2