axpayer Background

Chocochip Corporation, a U$.$S$.$ corporation that reports its U$.$S$.$ taxes on Form $1120,$ bakes the

world's best tasting white chocolate chip cookies. In addition to its U$.$S$.$ sales, Chocochip

markets its cookies in foreign countries through an extensive network of branch sales offices.

Chocochip's operating results for tax year $2022$ are summarized below by source and by type of

income:

U$.$S$.-$source income $60$ million

Foreign$-$source income $40$ million

Worldwide income $$100$ million

Chocochip paid $$15$ million of creditable foreign taxes on its net foreign$-$source income.

Chocochip is timely filing its $2022$ Form $1120$ and would like to know the U$.$S$.$ tax consequences

of the $$15$ million in taxes it paid to foreign countries. The U$.$S$.$ corporate income tax rate is $21\%$

in tax year $2022.$

Instructions

$$ Submit a $2022$ Form $1118$ with the relevant section$($s$)$ completed based on the taxpayer

information provided.

$$ Submit an excel file $($you can PDF the file if you wish$)$ with any supporting calculations for

your completed form. Stated differently, submit any work papers used to complete the

Form $1118.$