A US Citizen Accrued $120,000 of Creditable Foreign Taxes Last Year

question 27

Multiple Choice

A U.S. citizen accrued $120,000 of creditable foreign taxes last year. The citizen's foreign tax credit limitation for last year is $90,000 (only a single limitation need be calculated) . The excess foreign tax credit limitation for the year preceding the year in which the excess foreign taxes were incurred is $2,000. A similar $2,000 excess foreign tax credit limitation position is expected in each of the next 10 years. What portion of the excess foreign taxes can be expected to be noncreditable because of the foreign tax credit limitation?

• A) $8,000
• B) $2,000
• C) $0
• D) none of the above

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Definitions:

Death Instincts

In Freudian psychology, innate drives or impulses leading towards aggression, self-destruction, and death, opposed to life-sustaining instincts.

Human Instincts

Innate, typically fixed patterns of behavior in animals or humans in response to certain stimuli.

Repression

A defense mechanism where unwanted or discomforting thoughts and memories are unconsciously pushed from the conscious mind.

Denial

A defense mechanism whereby individuals refuse to acknowledge reality or facts, often as a way to protect themselves from uncomfortable emotions or truths.