Question

Joyce has $82,000 worldwide taxable income, which includes $11,000 of taxable income from China. She paid $2,200 in foreign income taxes to China, and her U.S. tax liability is $21,610. Joyce’s foreign tax credit is:

Answer 1

Solution:

Given data,

Joyce has $82,000 worldwide taxable income,

which includes $11,000 of taxable income from China.

She paid $2,200 in foreign income taxes to China,

and her U.S. tax liability is $21,610.

From the given data we need to find the Joyce’s foreign tax credit:

	Amount ($)
Total taxable income	$82,000
Taxable income from china	$11,000
Tax paid	$2,200
U.S tax liability	$21,610
foreign tax credit would be 2,200, tax paid abroad.

The foreign tax credit is a non-refundable tax credit for income taxes paid to aforeign government as a result of foreign income tax withholdings. The foreign tax credit is available to anyone who either works in a foreign country or has investment income from a foreign source.