A U.S.corporation can claim a credit for foreign taxes withheld from dividends paid by a foreign corporation in which it owns at least 10% of the stock.

Question

Quizplus · Accepted Answer

This statement is true. The credit is known as the foreign tax credit and is intended to prevent double taxation of the same income by both the foreign country and the United States. The foreign tax credit is calculated on Form 1116 and is limited to the lesser of the actual foreign tax paid or the U.S. tax liability on the foreign income.

A UScorporation Can Claim a Credit for Foreign Taxes Withheld from from Dividends