Elmo, Incorporated is a U.S. corporation with a branch office in foreign country Z. During the current year, Elmo had $411,000 of U.S. source income and $36,000 of foreign source income from Z, on which Elmo paid $16,800 of country Z income tax.

Required:

Calculate Elmos U.S. tax liability before foreign tax credit, maximum foreign tax credit allowable, and net U.S. tax liability after foreign tax credit.

If Elmo had paid only $4,080 of country Z income tax, calculate Elmos foreign tax credit allowable and net U.S. tax liability after foreign tax credit.

Required A

Calculate Elmos U.S. tax liability before foreign tax credit, maximum foreign tax credit allowable, and net U.S. tax liability after foreign tax credit. Note: Do not round any intermediate division.

	Amount
U.S. tax liability before foreign tax credit
Maximum foreign tax credit allowable
Net U.S. tax liability after foreign tax credit

Required B

If Elmo had paid only $4,080 of country Z income tax, calculate Elmos foreign tax credit allowable and net U.S. tax liability after foreign tax credit.

	Amount
Foreign tax credit allowable
Net U.S. tax liability after foreign tax credit