A taxpayer has income of $10,000 from Country A, which imposes a 20 percent income tax, and

Question:

A taxpayer has income of $10,000 from Country A, which imposes a 20 percent income tax, and $20,000 from Country B, which imposes a 50 percent income tax. The taxpayer has U.S. taxable income, including income from Country A and Country B of $90,000, and U.S. tax liability before credits of $20,000.

Calculate the amount of the foreign tax credit.

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