Columbus Inc.owns 100 percent of the stock of Spania,a foreign corporation.All of Spania's income is foreign source,and its foreign income tax rate is 20 percent.This year,Spania distributed a $100,000 dividend to Columbus.
a.Assuming that Columbus is in the 35 percent tax bracket,compute its U.S.tax on the dividend.
b.How would your computation change if Spania's foreign income tax rate was 45 percent?

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The Answer of Columbus Inc.owns 100 percent of the stock of Spania,a foreign corporation.All of Spania's income is foreign source,and its foreign income tax rate is 20 percent.This year,Spania distributed a $100,000 dividend to Columbus.
a.Assuming that Columbus is in the 35 percent tax bracket,compute its U.S.tax on the dividend.
b.How would your computation change if Spania's foreign income tax rate was 45 percent?