Use the following information to answer the question(s)below.
Incorporated Tool,a U.S.firm,is considering its international tax situation.The corporate tax rate in the U.S.is currently 39%.Incorporated Tool has major operations in Ireland,where the tax rate is 12.5%,Japan where the tax rate is 40.7%,and Mexico,where the tax rate is 30.0%.Incorporated Tool's profits,which are fully and immediately repatriated,and foreign taxes paid for the current year are as follows:
-Assuming that the Japanese and Mexican subsidiaries did not exist,the U.S.tax liability on the Irish subsidiary would be closest to:

Question

Use the following information to answer the question(s)below.
Incorporated Tool,a U.S.firm,is considering its international tax situation.The corporate tax rate in the U.S.is currently 39%.Incorporated Tool has major operations in Ireland,where the tax rate is 12.5%,Japan where the tax rate is 40.7%,and Mexico,where the tax rate is 30.0%.Incorporated Tool's profits,which are fully and immediately repatriated,and foreign taxes paid for the current year are as follows: 
-Assuming that the Japanese and Mexican subsidiaries did not exist,the U.S.tax liability on the Irish subsidiary would be closest to:

Quizplus · Accepted Answer

C)The tax liability in the U.S.would be $400 million × 39% = $156 million minus a tax credit for foreign taxes paid of $50 million,giving a total U.S.tax liability of $106 million.

Use the Following Information to Answer the Question(s)below