Quantco, a U.S. corporation, is an engineering consulting firm that has its main offices in San Diego, California. Because Quantco does a considerable amount of business in China, Quantco has a branch office in Beijing. During the current year, Quantco generates world-wide net income of $100 million (all from active business operations), including $80 million of net income from its U.S. operations and $20 million of net foreign-source income from its Chinese operations. Assume the U.S. tax rate is 21% and the Chinese rate is 30%, which applies to all the income earned in China.

a.) Compute Quantco's creditable foreign taxes, foreign tax credit limitation, and foreign tax credits. Is Quantco in an excess limitation or an excess credit position?

b.) Now assume that Quantco has a second foreign branch office in Singapore that generates $10 million of net income (all from active business operations, which is foreign-source income), on which Quantco pays Singapore taxes at a rate of 10%. Recompute Quantco's foreign income taxes paid, foreign tax credit limitation, and excess credits. What is the name of the concept by which the Singapore net income result in the elimination of the excess credits on the Chinese net income?

c.) Finally, assume the same facts as (b), but the $10 million of net income from Singapore subject to tax at a 10% rate constitutes interest income. Recompute Quantco's foreign income taxes paid, foreign tax credit limitations, and foreign tax credits.