A U.S.corporation receives a $200,000 dividend from a 20% owned foreign corporation.The deemed-paid taxes attributable to this dividend are $40,000 and foreign taxes withheld on remittance of the dividend are $30,000.The U.S.corporation's U.S.tax liability before FTC is $350,000,the gross dividend income is $240,000,and worldwide taxable income is $1 million.The U.S.corporation's foreign tax credit for the taxable year is:

Question

Quizplus · Accepted Answer

The foreign tax credit is the sum of the deemed-paid taxes ($40,000) and the foreign taxes withheld ($30,000), totaling $70,000.

A USCorporation Receives a $200,000 Dividend from a 20% Owned Foreign