17. LO.3 Drake, Inc., a U.S. corporation, operates a branch sales office in Turkey.

During the current year, Drake earned $500,000 in taxable income from U.S.

sources and $100,000 in taxable income from sources in Turkey. Drake paid $40,000 in income taxes to Turkey. All of the income is characterized as general operating income. Compute Drake’s U.S. income tax liability after consideration of any foreign tax credit. Drake’s U.S. tax rate is 21%.