8SMALLco is a domestic corporation that has elected S corporation status. SMALLco wholly owns a Canadian corporation, CANco. During the current year, CANco derives $100,000 of taxable income, pays $40,000 in Canadian income taxes, and distributes a $60,000 dividend to SMALLco. The Canadian income taxes of $40,000 are eligible to be taken as a foreign tax credit by:

SMALLco.

shareholders of SMALLco.

both SMALLco and SMALLco's shareholders.

neither SMALLco nor its shareholders.