Which of the Following Statements About the Foreign Tax Credit

question 13

Multiple Choice

Which of the following statements about the foreign tax credit limitation is false?

• A) The foreign tax credit cannot exceed the U.S. tax on foreign source income.
• B) Foreign tax credits in excess of the limit can be carried forward indefinitely.
• C) Cross-crediting of taxes paid in high-tax and low-tax foreign jurisdictions can increase allowable foreign tax credits.
• D) The foreign tax credit limitation is based on the ratio of foreign source income to total taxable income.