During the year,Green Corporation (a U.S.corporation)has U.S.-source income of $1,500,000 and foreign income of $1,000,000.The foreign-source income generates foreign income taxes of $480,000.The U.S.income tax before the foreign tax credit is $850,000.Green Corporation's foreign tax credit is:

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The foreign tax credit is limited to the lesser of the foreign taxes paid ($480,000) or the U.S. tax on the foreign-source income. The U.S. tax on the foreign-source income is calculated as ($1,000,000 / $2,500,000) * $850,000 = $340,000. Therefore, the foreign tax credit is $340,000.

During the Year,Green Corporation (A U