Barbara, a U.S. citizen has an opportunity to do business in a foreign country. After consulting with her CPA and attorney, Barbara forms a foreign eligible entity and makes a timely "Check-the-Box" election to treat the entity as a disregarded entity. If the entity generates foreign source taxable income of $400,000 and pays a 30% foreign income tax, how much tax will Barbara have to pay to the U.S. if she is a 37% taxpayer and she claims a foreign tax credit?

$148,000

$28,000

120,000

$0