Question

Brian and Clara paid $4,350 in foreign income taxes to Mexico. Their total income was $105,000, which included $16,000 of foreign income. Their U.S. tax liability is $22,750. How much can Brian and Clara claim as foreign tax credit

Answer 1

Answer:

$3,467

Explanation:

Calculation for How much can Brian and Clara claim as foreign tax credit

Using this formula

Foreign tax credit=(Foreign income/Total income)×U.S. tax liability

Let plug in the formula

Foreign tax credit=($16,000/$105,000) x $22,750

Foreign tax credit=0.15238095×$22,750

Foreign tax credit= $3,467

Therefore the amount that Brian and Clara can claim as foreign tax credit will be $3,467