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jekas [21]
3 years ago
8

Saginaw Steel Corporation has a precredit U.S. tax of $105,000 on $500,000 of taxable income in 2018. Saginaw has $200,000 of fo

reign source taxable income and paid $60,000 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 2018 tax return will be:
Business
1 answer:
jek_recluse [69]3 years ago
8 0

Answer: $42000

Explanation:

Saginaw's foreign tax credit on its 2018 tax return will be calculated thus:

= Foreign source taxable income × precredit U.S tax/Taxable income

= 200000 × 105000/500000

= 200000 × 0.21

= 42000

Therefore, the foreign tax credit will be the least between $60,000 paid to the German government or $42000. In this case, the answer is $42000

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2 years ago
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C) III

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4 years ago
Russell Co. reports sales revenue of $30,600 and interest revenue of $5,600. Its comparative balance sheet shows that accounts r
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