Axtell Corporation has the following taxable income: U.S. source income $ 1,620,000 Foreign source income:   Country A 550,000 Country B 2,000,000 Country C 2,900,000 Taxable income $ 7,070,000 Axtell paid $600,000 income tax to Country B and $1.3 million income tax to Country C. Country A does not have a corporate income tax. Required: Compute Axtell’s U.S. income tax, assuming the foreign source income does not qualify as FDII.

SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter16: Multijurisdictional Taxation
Section: Chapter Questions
Problem 18P
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Axtell Corporation has the following taxable income:

U.S. source income $ 1,620,000
Foreign source income:  
Country A 550,000
Country B 2,000,000
Country C 2,900,000
Taxable income $ 7,070,000

Axtell paid $600,000 income tax to Country B and $1.3 million income tax to Country C. Country A does not have a corporate income tax.

Required:

Compute Axtell’s U.S. income tax, assuming the foreign source income does not qualify as FDII.

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