Answered

At Westonci.ca, we connect you with experts who provide detailed answers to your most pressing questions. Start exploring now! Discover solutions to your questions from experienced professionals across multiple fields on our comprehensive Q&A platform. Experience the convenience of finding accurate answers to your questions from knowledgeable experts on our platform.

Saginaw Steel Corporation has a precredit U.S. tax of $110,000 on $505,000 of taxable income. Saginaw has $205,000 of foreign source taxable income and paid $65,000 of income taxes to the German government on this income. All of the foreign source income is treated as foreign branch income for foreign tax credit purposes. Saginaw's foreign tax credit on its tax return will be: (Do not round intermediate calculations. Round your answer to nearest whole dollar amount.)

Sagot :

Answer: $44654

Explanation:

Based on the information given, the foreign tax credit will be allowed to the amount of the tax that is paid to foreign government which is $65000 which is then subject to the US tax limit that is applicable on that particular income which will be:

= 205000 × 110000/505000

= 44654

Therefore, the tax credit will be the one that's lesser between $65000 and $44654. Therefore the answer will be $44654.

Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. Your visit means a lot to us. Don't hesitate to return for more reliable answers to any questions you may have. Find reliable answers at Westonci.ca. Visit us again for the latest updates and expert advice.