Which Tax Rule Applies to an Excess Foreign Tax Credit

question 63

Multiple Choice

Which tax rule applies to an excess foreign tax credit (FTC) that arises in 2020?

• A)The excess FTC is first carried back to 2019 and any excess is carried forward for 10 years.
• B)The excess FTC is first carried back to 2018, then 2019, and any excess is carried forward for 20 years.
• C)The excess FTC is first carried back to 2017, then 2018, then 2019, and any excess is carried forward for five years.
• D)The excess FTC is carried forward 10 years, with no carryback allowed.

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Definitions:

Total Costs

The sum of all the costs incurred in the production of goods or services, including both fixed and variable costs.

Daily Profit

The financial gain calculated as the difference between revenue and expenses for a single day.

Capacity

The maximum output that a company can produce under normal conditions over a given period of time.

Marginal Costs

The uplift in total financial outlay required for the making of another unit of a product or service.