Tree Inc. is a branch of Todd Corporation located in Foreignland. The corporate tax rate in Foreignland is 20% in year 1, and 23% in years 2 and 3. The corporate tax rate in the U.S. is 21% for all years. Below is additional information about different amounts: Year 1 Year 2 Year 3 Foreign Source Income 74000 94000 104000 Foreign Taxes Paid 14800 21620 23920 U.S. tax before FTC 15540 19740 21840 Questions: 1. What is the foreign tax credit allowed in the U.S. for each of the years? 2. What is the U.S. tax liability for each of the years? 3. In Year 3, how much excess foreign tax credit can Todd Corportation carry back?
Tree Inc. is a branch of Todd Corporation located in Foreignland. The corporate tax rate in Foreignland is 20% in year 1, and 23% in years 2 and 3. The corporate tax rate in the U.S. is 21% for all years. Below is additional information about different amounts: Year 1 Year 2 Year 3 Foreign Source Income 74000 94000 104000 Foreign Taxes Paid 14800 21620 23920 U.S. tax before FTC 15540 19740 21840 Questions: 1. What is the foreign tax credit allowed in the U.S. for each of the years? 2. What is the U.S. tax liability for each of the years? 3. In Year 3, how much excess foreign tax credit can Todd Corportation carry back?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Tree Inc. is a branch of Todd Corporation located in Foreignland. The corporate tax rate in Foreignland is 20% in year 1, and 23% in years 2 and 3. The corporate tax rate in the U.S. is 21% for all years.
Below is additional information about different amounts:
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Foreign Source Income | 74000 | 94000 | 104000 |
| Foreign Taxes Paid | 14800 | 21620 | 23920 |
| U.S. tax before FTC | 15540 | 19740 | 21840 |
Questions:
1. What is the foreign tax credit allowed in the U.S. for each of the years?
2. What is the U.S. tax liability for each of the years?
3. In Year 3, how much excess foreign tax credit can Todd Corportation carry back?
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