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7-21 (Algorithmic) Foreign Exclusion and Tax Credit (LO 7.6) Martha and Lew are married taxpayers with $1,850 of foreign tax withholding from dividends in a
7-21 (Algorithmic) Foreign Exclusion and Tax Credit (LO 7.6) Martha and Lew are married taxpayers with $1,850 of foreign tax withholding from dividends in a mutual fund. They have enough foreign income from the mutual fund to claim the full $1,850 as a foreign tax credit. Their tax bracket is 35 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. S
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