Fredericton Corp. earned $60,000 in foreign business income in the current fiscal year.
Tax was paid to the foreign government in the amount of $7,500 on this income. Frederic-ton Corp. has correctly calculated its federal Tax Payable before the foreign business income tax credit as $15,250, calculated as follows:
Base Amount of Part I tax
$48.000
Federal Tax Abatement
( 12,000)
Small Business Deduction
( 19,250)
General Rate Reduction
1,500)
Federal Tax Payable Before Foreign Business Tax Credit
$15,250
What is the amount of Tax Otherwise Payable for purposes of the foreign business income tax credit calculation?