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Spartan Corporation, a U.S. corporation, reported $5.6 million of pretax income from its business operations in Spartania, which were conducted through a foreign branch. Spartania

image text in transcribed Spartan Corporation, a U.S. corporation, reported $5.6 million of pretax income from its business operations in Spartania, which were conducted through a foreign branch. Spartania taxes branch income at 15 percent, and the United States taxes corporate income at 21 percent. Required: a. If the United States provided no mechanism for mitigating double taxation, what would be the total tax (U.S. and foreign) on the $5.6 million of branch profits? b. Assume the United States allows U.S. corporations to exclude foreign source income from U.S. taxation. What would be the total tax on the $5.6 million of branch profits? c. Assume the United States allows U.S. corporations to claim a deduction for foreign income taxes. What would be the total tax on the $5.6 million of branch profits? d-1. Assume the United States allows U.S. corporations to claim a credit for foreign income taxes paid on foreign source income. What would be the total tax on the $5.6 million of branch profits? d-2. Assume the United States allows U.S. corporations to claim a credit for foreign income taxes paid on foreign source income. What would be your answer if Spartania taxed branch profits at 30 percent? (For all requirements, enter your answers in dollars and not in millions of dollars.) Answer is complete but not entirely correct

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