Reference no: EM132788175

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 88,000              108 ,000         118,000
Foreign Taxes Paid 17,600                       24,840        27,140
US Tax before FTC 18,480                       22,680            24,780

Question 1: What is the foreign tax credit allowed in the U.S. for each of the years?

Question 2: What is the U.S. tax liability for each of the years?

Question 3: In Year 3, how much excess foreign tax credit can Todd Corportation carry back?