Boca Corporation, a U.S. corporation, reported U.S. taxable income of $1,000,000 in2017. Included in the computation of taxable income was foreign source taxable income of $200,000, of which $87,500 was a dividend received from the corporation's 100percent owned subsidiary in Ireland. The dividend brought with it a deemed paid creditof $12,500. In addition, a withholding tax of $4,375 was imposed on the dividend. Compute Boca Corporation's net U.S. tax liability for 2017. Assume a U.S. tax rate of 34 percent.

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Boca Corporation's U.S. tax liability before credits is $340,000 (34% of $1,000,000). The foreign tax credit is the sum of the deemed paid credit ($12,500) and the withholding tax ($4,375), totaling $16,875. The net U.S. tax liability is $340,000 - $16,875 = $323,125.