Foreign Exclusion and Tax Credit (LO 7.6) Martha and Lew are married taxpayers with $2,950 of...

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Foreign Exclusion and Tax Credit (LO 7.6) Martha and Lew are married taxpayers with $2,950 of foreign tax withholding from dividends in a mutual fund. They have enough foreign income from the mutual fund to claim the full $2,950 as a foreign tax credit. Their tax bracket is 25 percent and they itemize deductions. Should they claim the foreign tax credit or a deduction for foreign taxes on their Schedule A? If required, round your answer to the nearest dollar. The foreign tax deduction will result in a $ tax benefit where as claiming the foreign tax credit yields a tax benefit. Therefore, the taxpayers should claim the foreign tax credit. Foreign Exclusion and Tax Credit (LO 7.6) Martha and Lew are married taxpayers with $2,950 of foreign tax withholding from dividends in a mutual fund. They have enough foreign income from the mutual fund to claim the full $2,950 as a foreign tax credit. Their tax bracket is 25 percent and they itemize deductions. Should they claim the foreign tax credit or a deduction for foreign taxes on their Schedule A? If required, round your answer to the nearest dollar. The foreign tax deduction will result in a $ tax benefit where as claiming the foreign tax credit yields a tax benefit. Therefore, the taxpayers should claim the foreign tax credit.

Answer rating: 100% (QA)

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