Brendan paid $950 to Brazil in foreign income taxes.His total income was $52,500,which included $12,000 of investment income from Brazil.His U.S.tax liability is $8,000.Brendan's foreign tax credit is:

A) $0.
B) $950.
C) $1,829.
D) $12,000.

Question

Shelton Hardy · Accepted Answer

Final Answer : B, Explanation :  Brendan's foreign tax credit is $950, which is the amount he paid in foreign income taxes to Brazil. The foreign tax credit is designed to prevent double taxation by allowing taxpayers to credit the amount of foreign taxes paid against their U.S. tax liability, up to the limit of their U.S. tax liability on foreign-earned income.

Brendan paid $950 to Brazil in foreign income taxes.His total income was $52,500,which included $12,000 of investment income from Brazil.His U.S.tax liability is $8,000.Brendan's foreign tax credit is:

A) $0.
B) $950.
C) $1,829.
D) $12,000.

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Learning Objectives

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Brendan paid $950 to Brazil in foreign income taxes.His total income was $52,500,which included $12,000 of investment income from Brazil.His U.S.tax liability is $8,000.Brendan's foreign tax credit is:A) $0.B) $950.C) $1,829.D) $12,000.

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Learning Objectives

Learning Objectives

Related questions

Brendan paid $950 to Brazil in foreign income taxes.His total income was $52,500,which included $12,000 of investment income from Brazil.His U.S.tax liability is $8,000.Brendan's foreign tax credit is:

A) $0.
B) $950.
C) $1,829.
D) $12,000.