Foreign income taxes paid on foreign source income

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Question

Spartan Corporation, a U.S. corporation, reported $7 million of pretax income from its business operations in Spartania, which were conducted through a foreign branch. Spartania taxes branch income at 15 percent, and the United States taxes corporate income at 21 percent.

Assume the United States allows U.S. corporations to claim a credit for foreign income taxes paid on foreign source income. What would be your answer if Spartania taxed branch profits at 30 percent?

Reference no: EM133306476

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