USCo, a domestic corporation, reports worldwide taxable income of $500,000, including a $100,000 dividend from ForCo, a wholly owned foreign corporation. ForCo’s post-1986 undistributed earnings and profits total $1 million, and it has paid $200,000 of foreign income taxes attributable to these earnings. All foreign income is in the general limitation basket.
What is USCo’s deemed-paid (indirect) foreign tax credit related to the dividend received (before consideration of any limitation)?
ABC, Inc., a domestic corporation, owns 100% of HighTax, a foreign corporation. HighTax has $50 million of post-1986 undistributed earnings, all of which is attributable to general limitation income, and $50 million of post-1986 foreign income taxes. HighTax distributes a $5 million dividend to ABC. The dividend, which is subject to a 5% foreign withholding tax, is ABC’s only item of income during the year. The U.S. tax rate is 35%.
What amount of excess foreign tax credits is produced by the dividend?
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.