Julia, an Accrual- Method Taxpayer, Is a U

question 38

Multiple Choice

Julia, an accrual- method taxpayer, is a U.S. citizen and a resident of a foreign country. Her tax year for both countries is a calendar year. Julia accrues 50,000 coras for the foreign country tax liability on December 31 of last year when the exchange rate is one cora = $1. Julia pays the tax to the foreign country on its due date, March 1 of the current year. The exchange rate on that date is one cora = $1.50. Julia files her U.S. tax return for last year on April 15 of the current year when the exchange rate is one cora = $2. Julia's foreign tax credit is

• A) $75,000.
• B) $50,000.
• C) $100,000.
• D) none of the above

---

Definitions:

Existence

The fact or state of living or having objective reality.

Initialization

The process of assigning an initial value to a variable at the time of its creation.

Static Variables

Variables that retain their value between function calls and are local to the function block in which they are declared but their lifespan is the duration of the program.

Automatic Variables

Variables that are automatically allocated on the stack and are local to the function block in which they are declared.