Scott, Inc., a domestic corporation, receives a dividend of $700,000 from a non-CFC foreign corporation.Deemed-paid foreign taxes attributable to the dividend are $120,000.If Scott elects the FTC, its gross income attributable to this dividend is $700,000.

Question

Quizplus · Accepted Answer

If Scott elects the FTC (Foreign Tax Credit), its gross income attributable to the dividend will be reduced by the amount of foreign taxes deemed paid, which is $120,000. Therefore, its gross income will be $580,000 ($700,000 - $120,000).