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QUESTION
16-41 Foreign Tax Credit Limitation. Tucson, a U. corporation organized in Year 1, reports the following items for a three-year period.
16-41 Foreign Tax Credit Limitation. Tucson, a U.S. corporation organized in Year 1, reports the following items for a three-year period.
Year1 Year 2 Year3
Foreign tax accrual $ 100,000 $ 120,000 $ 180,000
Foreign source taxable income 400,000 300,000 500,000
Worldwide taxable income 1,000,000 1,000,000 1,000,000
The foreign source and worldwide taxable income items are determined under U.S. law.
b. How are Tucsons excess foreign tax credits (if any) treated? Do any carryovers remain after Year 3?
