### Question
What does base amount mean?


### Answer
**Base amount** has the following meaning in *26 U.S.C. § 41*:

> the product of—


(A) the fixed-base percentage, and


(B) the average annual gross receipts of the taxpayer for the 4 taxable years preceding the taxable year for which the credit is being determined (hereinafter in this subsection referred to as the "credit year")

#### Citation:
  - *26 U.S.C. § 41*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter A-Determination of Tax Liability > PART IV-CREDITS AGAINST TAX > Subpart D-Business Related Credits**

