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Charlie, a U.S. taxpayer, earned $70,000 in foreign income during the tax year. Of this amount, $40,000 was passive income, and the remaining $30,000 was general income. Charlie paid foreign taxes of $8,000 on the passive income and $12,000 on the general income. What is the maximum foreign tax credit he can claim? a) $20,000 b) $8,000 c) $12,000 d) $0

Charlie, a U.S. taxpayer, earned $70,000 in foreign income during the tax year. Of this amount, $40,000 was passive income, and the remaining $30,000 was general income. Charlie paid foreign taxes of $8,000 on the passive income and $12,000 on the general income. What is the maximum foreign tax credit he can claim? a) $20,000 b) $8,000 c) $12,000 d) $0

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Charlie, a U.S. taxpayer, earned $70,000 in foreign income during the tax year. Of this amount, $40,000 was passive income, and the remaining $30,000 was general income. Charlie paid foreign taxes of $8,000 on the passive income and $12,000 on the general income. What is the maximum foreign tax credit he can claim? a) $20,000 b) $8,000 c) d) $0 $12,000
Transcribed Image Text:Charlie, a U.S. taxpayer, earned $70,000 in foreign income during the tax year. Of this amount, $40,000 was passive income, and the remaining $30,000 was general income. Charlie paid foreign taxes of $8,000 on the passive income and $12,000 on the general income. What is the maximum foreign tax credit he can claim? a) $20,000 b) $8,000 c) d) $0 $12,000
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