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Sonar, a US company operating in the US and Country X, had pretax US source income and foreign source income as follows: US source income
Sonar, a US company operating in the US and Country X, had pretax US source income and foreign source income as follows:
US source income | $ | 600,000 |
|
Foreign source incomeCountry X |
| 100,000 |
|
Total | $ | 700,000 |
|
Sonar paid $40,000 income taxes to Country X. What is Sonars net US tax liability (using a 21% corporate income tax rate) if it claims a foreign tax credit against its US tax liability for the income taxes paid in Country X?
Select one:
a. $107,000
b. $126,000
c. $147,000
d. $166,000
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