Kim, a U.S. citizen and resident, owns and operates a novelty goods business. During 2021, Kim reports taxable income of $115,000:$50,000 from foreign sources and $65,000 from U.S. sources. In calculating taxable income, the standard deduction is used. The incomefrom foreign sources is subject to foreign income taxes of $17,500. For 2021, Kim files a joint return with her spouse.Click here to access the tax rate schedule.a. Assuming that Kim chooses to claim the foreign taxes as an income tax credit, what is her net Federal income tax payable for 2021?5,818.35 X Single-Schedule XIf taxableincome is:Over-$income is:Over-$But notover-019,90081,050172,750329,850418,850628,300$ 9,95040,52586,375164,925209,425523,60009,950$ 995.00 +12%40,5254,664.00 +22%86,37514,751.00 +24%164,92533,603.00 +32%209,42547,843.00+ 35%523,600157,804.25 +37%Married filing jointly or Qualifying widow(er)-Schedule Y-1If taxableBut notover-$ 19,90081,050172,750329,850418,850628,300The tax is:*********.........10%The tax is:......... 10%$ 1,990.00 +12%9,328.00 +22%29,502.00 +24%2021 Tax Rate Schedules67,206.00+ 32%95,686.00+ 35%168,993.50 +37%of theamountover-$09,95040,52586,375164,925209,425523,600of theamountover-$019,90081,050172,750329,850418,850628,300Head of household-Schedule ZIf taxableincome is:Over-If taxableincome is:Over-$ 0But notover-$ 14,20054,20086,350164,900209,400523,600$014,20054,20086,350164,900209,400523,600Married filing separately-Schedule Y-29,95040,52586,375164,925209,425314,150But notover-The tax is:$ 9,95040,52586,375164,925209,425314,150.........10%$ 1,420.00+ 12%6,220.00 +22%13,293.00 +24%32,145.00+ 32%46,385.00+ 35%156,355.00+ 37%The tax is:.........10%$ 995.00 +12%4,664.00 +22%14,751.00 +24%33,603.00+ 32%47,843.00 + 35%84,496.75 +37%of theamountover-$014,20054,20086,350164,900209,400523,600of theamountover-$09,95040,52586,375164,925209,425314,150

A U.S. tax credit known as the foreign tax credit is utilized to offset overseas income tax paid.…

Answered: Kim, a U.S. citizen and resident, owns…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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