Reno Corporation, a U.S. corporation, reported total taxable income of $6,260,000 in the current year. Taxable income included $1,878,000 of foreign source taxable income from the company's branch operations in Canada. All of the branch income is foreign branch income. Reno paid Canadian income taxes of $463,000 on its branch income. Compute Reno's net U.S. tax liability and any foreign tax credit carryover. Assume an exchange rate of C$1 = $1.

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The Answer of Reno Corporation, a U.S. corporation, reported total taxable income of $6,260,000 in the current year. Taxable income included $1,878,000 of foreign source taxable income from the company's branch operations in Canada. All of the branch income is foreign branch income. Reno paid Canadian income taxes of $463,000 on its branch income. Compute Reno's net U.S. tax liability and any foreign tax credit carryover. Assume an exchange rate of C$1 = $1.