Question
Problem 7-21 (Algorithmic) Foreign Tax Credit (LO 7.6) Martha and Lew are married taxpayers with $2,700 of foreign tax withholding from dividends in a mutual
Problem 7-21 (Algorithmic) Foreign Tax Credit (LO 7.6)
Martha and Lew are married taxpayers with $2,700 of foreign tax withholding from dividends in a mutual fund. They have enough foreign income from the mutual fund to claim the full $2,700 as a foreign tax credit. Their tax bracket is 25 percent and they itemize deductions.
Should they claim the foreign tax credit or a deduction for foreign taxes on their Schedule A?
If required, round your answer to the nearest dollar.
The foreign tax deduction will result in a $fill in the blank 1 tax benefit where as claiming the foreign tax credit yields a $fill in the blank 2 tax benefit. Therefore, the taxpayers should
claim the foreign tax credit.deduct the foreign taxes.
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