What is the US tax liability for each of the years

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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

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

Required -

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?

Reference no: EM132795654

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