Under USTax Law,what Happens to Excess Foreign Tax Credit

question 59

Multiple Choice

Under U.S.tax law,what happens to excess foreign tax credit?

• A)It reduces taxes on ordinary income in the current year.
• B)It can be carried back one year to calculate a refund on additional taxes paid to the U.S.on foreign source income.
• C)It is lost unless the average foreign tax rate paid by the company in the future is greater than the U.S.tax rate.
• D)none of the above

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Definitions:

After-Tax Profit

The net profit of a company after all taxes have been deducted from revenues.

Confidence Interval

A range of values, derived from sample statistics, that is likely to contain the value of an unknown population parameter with a certain level of confidence.

Population Standard Deviation

A measure of the dispersion or variability within a total population, quantifying how much the individual data points differ from the population mean.

Average Income

Average income is the total income divided by the number of entities in the group, providing a simple measure of the economic well-being of a population.