Ames Corporation has a precredit U.S. tax of $340,000 on $1,000,000 of taxable income in 2016. Ames has $600,000 of foreign source taxable income and paid $120,000 of income taxes to the Australian government on this income. All of the foreign source income is treated as general category income for foreign tax credit purposes. Ames's foreign tax credit on its 2016 tax return will be:

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The Answer of Ames Corporation has a precredit U.S. tax of $340,000 on $1,000,000 of taxable income in 2016. Ames has $600,000 of foreign source taxable income and paid $120,000 of income taxes to the Australian government on this income. All of the foreign source income is treated as general category income for foreign tax credit purposes. Ames's foreign tax credit on its 2016 tax return will be:

Ames Corporation Has a Precredit U