Am I understanding this correctly and do I have the deduction for foreign taxes paid calculated correctly with the income taxes paid and the sales and other taxes paid added together?

Lionais Company has a foreign branch that earns income before income taxes of 500,000 currency units (CU). Income taxes paid to the foreign government are CU 150,000 (30%). Sales and other taxes paid to the foreign government are CU 50,000. Lionais ompany must include the CU 500,000 of foreign branch income in determining its home country taxable income. In determining its taxable income, Lionais can choose between taking a deduction for all foreign taxes paid or a credit only for foreign income taxes paid. The corporate income tax rate in Lionais' home country is 40%. Required:

Determine whether Lionais would be better off taking a deduction or a credit for foreign taxes paid.

	Deduction	Credit
Foreign source income	500,000	500,000
Deduction for all foreign taxes paid	200,000	0
Home taxable income	300,000	500,000
Income tax before credit (40%)	120,000	200,000
FTC allowed	0	150,000
Net home tax liability	120,000	50,000

Lionais would be better off taking the credit for foreign taxes paid since this leaves them with a lower net home tax liability amount.