In computing the foreign tax credit,the lesser of the foreign income taxes paid or the overall limitation is allowed.

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The foreign tax credit allows taxpayers to offset taxes paid to a foreign country with their U.S. tax liability. The credit is limited to the amount of U.S. tax liability that relates to foreign income. Taxpayers can only claim the lesser of the foreign income taxes paid or the overall limitation on the foreign tax credit. This means that if the foreign income taxes paid exceeds the overall limitation, taxpayers can only claim the overall limitation as a credit on their U.S. tax return.

In Computing the Foreign Tax Credit,the Lesser of the Foreign