Illinois Steel is a specialty steel manufacturer that does business in the United States, Canada, and Brazil. Illinois Steel is organized as follows. The parent, Illinois Steel, is incorporated in Illinois and had pretax income from its U.S. operations of $5 million in 2013. Illinois Steel owns 100% of the stock of ISB, its Brazilian subsidiary, which reported pretax income of $3 million in 2013. Illinois Steel directly owns its Canadian operations (that is, the Canadian group is a branch), which recorded pretax income of $10 million in 2013. Assume all earnings are reinvested in the country where they were earned.
Assume the tax rates in the countries are United States, 35%; Canada, 30%; Brazil, 25%.
A. What is Illinois Steel's 2013U.S. tax liability after foreign tax credits?