Mega, Inc., a U.S. multinational, has pretax U.S. source income and foreign source income as follows. $$\begin{array} { l r }
\text { U.S. source income } & \$ 760,000 \
\text { Foreign source income--Country M } & \underline { 80,000 } \
\text { Total } & \$ 840,000
\end{array}$$ Mega paid $20,000 income tax to Country M. Mega has a $25,000 foreign tax credit carryforward. What is Mega's U.S. tax liability if it takes the foreign tax credit?

Question

Mega, Inc., a U.S. multinational, has pretax U.S. source income and foreign source income as follows. $$\begin{array} { l r } 
\text { U.S. source income } & \$ 760,000 \
\text { Foreign source income--Country M } & \underline { 80,000 } \
\text { Total } & \$ 840,000
\end{array}$$ Mega paid $20,000 income tax to Country M. Mega has a $25,000 foreign tax credit carryforward. What is Mega's U.S. tax liability if it takes the foreign tax credit?

Quizplus · Accepted Answer

The Answer of Mega, Inc., a U.S. multinational, has pretax U.S. source income and foreign source income as follows. $$\begin{array} { l r } 
\text { U.S. source income } & \$ 760,000 \
\text { Foreign source income--Country M } & \underline { 80,000 } \
\text { Total } & \$ 840,000
\end{array}$$ Mega paid $20,000 income tax to Country M. Mega has a $25,000 foreign tax credit carryforward. What is Mega's U.S. tax liability if it takes the foreign tax credit?

Mega, Inc, a U Mega Paid $20,000 Income Tax to Country M