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Foreign Exclusion and Tax Credit (LO 7.6) Taxpayer L has income of $55,000 from Norway, which imposes a 40 percent income tax, and income of
Foreign Exclusion and Tax Credit (LO 7.6)
Taxpayer L has income of $55,000 from Norway, which imposes a 40 percent income tax, and income of $45,000 from France, which imposes a 30 percent income tax. L has additional taxable income from U.S. sources of $200,000 and U.S. tax liability before credits of $105,000. What is the amount of the foreign tax credit? Do not round any division in your computations. If required, round your answer to the nearest dollar.
a. $35,500
b. $16,500
c. $45,000
d. $35,000
e. $100,000
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