entity	country	percent owned	activity	income before tax	income tax rate	dividend withholding rate	net amount received by parent
usic	united states	n/a	n/a	40,000,000	35%	n/a	n/a
a	australia	90%	manufacturing	8,000,000	35%	5%	4,000,000
c	chile	51%	manufacturing	5,000,000	17%	35%	2,000,000
i	ireland	100%	investment	2,000,000	12.5%	0%	0
m	malaysia	100%	manufacturing	2,000,000	25%	0%	1,000,000
n	netherlands	100%	distribution	3,000,000	25.5%	0%	100,000
s	switzerland	100%	banking	500,000	21%	0%	100,000
t	turkey	80%	manufacturing	1,000,000	20%	15%	300,000

U.S. International Corporation

U.S. International Corporation (USIC), a U.S. taxpayer, has investments in Foreign Entities A, C, I, M, N, S, and T. Relevant information for these entities for the current fiscal year appears in the following table:

Additional Information

1. USICs $40 million income before tax is derived from the production and sale of products, which includes sales to local customers in the United States and export sales to Entity N.

2. Each entity is legally incorporated in its host country other than Entity M, which is registered with the Malaysian government as a branch.

3. Entities A, C, M, and T produce and market products in their home countries.

4. Entity I makes passive investments in stocks and bonds in world financial markets. Income is derived solely from dividends and interest.

5. Entity N distributes goods purchased from (manufactured by) USIC. Of Ns sales, 90 percent are made in France, Germany, and Italy, and 10 percent are made in the Netherlands.

6. Entity S operates in the banking industry in Switzerland.

Required

Determine the following:

a. The amount of U.S. taxable income for each Entity A, C, I, M, N, S, and T.

b. The foreign tax credit allowed in the United States, first by basket and then in total.

c. The net U.S. tax liability. Remember to include U.S. source income in determining the total U.S. tax liability.

d. Any excess foreign tax credits (identify by basket).